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Tax Center News

Too Busy For Tax Season? Consider a Filing Extension

The April 15th deadline for filing income tax returns is quickly approaching. A popular option to consider is an extension of time to file a return.

Time to Review Medicare Surtax Liability for 2013

2013 ushered in the new 0.9 percent Medicare tax on higher-earning individuals. As the year draws to a close, employers, employees and self-employed should review the rules governing withholding and liability to make sure the amounts are on track with what will be owed.

Standard Mileage Rates Drop for 2014

The standard mileage rate for business miles driven in 2014 will be 56 cents. The rate for miles driving for medical or moving purposes will be 23.5 cents per mile. The rate for charitable miles remains at 14 cents per mile.

S Corp Elections for 2014 Are Due as Your 2014 Tax Year Gets Started

A trap for the unwary is that S corp elections are due by the early part of the tax year. If you want your business to be an S corp, be sure your election is filed on time.

Across the Nation: IRS Fast Track Settlement Program for Small Businesses

The IRS Fast Track Settlement program for small business is now available nationwide. The program's goal is to expedite case resolution and resolve audit issues for businesses under audit.

Many Tax Amounts Inflation-Adjusted Upward for 2014

The bad news is that we are seeing steady price increases due to inflation. The good news is that the IRS is taking this into account and adjusting many tax provisions, such as personal exemptions and the tax bracket amounts, for 2014.

The Basics of Trusts in Estate Planning

Business owners should be familiar with trusts, which are commonly used in estate planning. Trusts provide a great amount of flexibility and are extremely useful in planning to provide for loved ones.

New Repair Deduction Rules for 2014 Trigger Need for Expert Tax Guidance

There are new rules for determining when costs incurred are business expenses, which are immediately deductible in full, or capital expenses, which are deducted over a period of many years. These highly complicated regulations will affect nearly every business starting in 2014. Expert tax advice is necessary to avoid making costly blunders when acquiring, repairing or improving your business assets.

Types of Trusts: Revocable, Irrevocable, Living, and Testamentary

Many types of trusts are used in estate planning. Common trust aspects include revocable vs. irrevocable, and, living vs. testamentary.

Extended Filers Have Until October 15 to Establish SEP Plan

Remember that income tax return you didn't file in April? It's due October 15! But, on the bright side, waiting to file means that you gave yourself more time to establish and fund a retirement plan.

Hurry! Expensing of Qualified Real Property Ends in 2013

Businesses may be able to expense up to $250,000 in costs incurred in certain types of restaurant, retail store and leasehold improvements. However, this incentive, along with others, ends at the end of the year. Talk to your advisor today before time runs out.

Late on Your Late S Corp Election? Fix It and Save Money!

Companies electing S corporation taxation often miss the critical tax election deadlines for obtaining this pass through tax status. The good news is that businesses using a new IRS method can avoid the expense of the IRS letter ruling process for correcting these mistakes. The new method consolidates prior procedures for late S corporation elections, late Qualified Subchapter S Subsidiary (QSub) elections, Electing Small Business Trust Elections (ESBT) elections and Qualified Subchapter S Trust (QSST) elections. Talk to your advisor today.

Check, Please! Deducting Reimbursed Meal Expenses

Recent IRS guidance addresses the 50-percent limitation on deducting meal and entertainment expenses. The rules cover reimbursement arrangements involving three-party situations (e.g., employee leasing companies) or any person who is not an employee (such as an individual or a company providing services for a client). Talk to your advisor today to ensure your arrangements are getting you the best tax savings.

A Look Ahead: Deadline for Filing Extended Tax Returns is Approaching

The extended deadline for individual and business tax returns is quickly approaching. Now is a good time to talk to your advisor and get your documents in order.

Do You Owe the IRS? This Program May Help

Taxpayers with good compliance history may be eligible for first-time abatement penalty relief. This administrative waiver is a one-time consideration and is based on compliance history.

Re-Estimate Your Estimated Tax To Avoid Unpleasant Surprise

You can owe penalties for failure to pay enough estimated tax, even if you are due a refund when you file your tax return. Tax law changes that took effect for this year, as well as changes in your own financial situation, could mean that you are underpaying. With two payment periods left for 2013 estimated tax, now is the time for an estimated tax check up.

Summer Travel Deductions: Fun-Fun-Fun Until the Tax Man Takes the T-Bird Away

If you plan to travel for business this summer, be sure to plan ahead to maximize available deductions.

New Updating Requirements for EIN Holders

Businesses use their employer identification number (EIN) on tax forms similar to the way individuals use their Social Security numbers on tax forms. Obtaining an EIN used to be a one-time event. Starting in 2014, however, anyone with a current EIN will have to provide updated application information to the IRS.

Keeping Up With June Tax Deadlines

June involves several tax deadlines in addition to summer celebrations. In light of IRS closures on furlough days that fall on or near 2013 due dates, it helps to plan ahead. Make sure you stay on top of important dates.

Act Fast: Expanded Voluntary Worker Reclassification Program Ends June 30

Misclassifying a worker as an independent contractor, rather than an employee, is one of the more costly mistakes a business owner can make. The IRS's voluntary worker reclassification program helps lower the cost of correcting that mistake a bit less expensive--and a temporary extension makes it available to more employers. But you must act now because the expanded program expires on June 30, 2013.

IRS Promises To Get Warrant Before Reading Your Email, But Not Social Media

In the face of an outcry from Congress, the IRS announced that it will obtain a search warrant before accessing the email account of taxpayers facing criminal tax charges and that it will not access private email accounts when conducting a civil investigation. However, the IRS may consider "public information" on social media accounts during a tax collection or audit proceeding.

Six Steps to Prepare for Sale Tax Holidays

Stay Clear of the “Dirty Dozen” Tax Scams

The IRS cautions taxpayers to protect themselves and avoid these "dirty dozen" tax scams.

Plan Now to Avoid Paying More in Taxes Next Year

Due to recent tax changes, this year’s post-tax season review involves more than the “routine” reviews of years past. Without proper planning, you may end up paying more in taxes next year, even if your situation does not otherwise change. Tax planning opportunities this year include taking advantage of extended tax benefits and considering a C corporation or S corporation.

Filing a Federal Extension? Don't Forget About Your State Return

As you scramble to get your federal tax returns filed, don't forget your state tax return is likely to be due on the same day. And, if you are requesting an extension for your federal taxes, make sure you know the rules for your state tax extension.

Tax Return Tips for Last-Minute Filers

The April 15th deadline for filing your income tax return is quickly approaching. Here are some last minute tips to help you lower you tax bill.

Beat Tax Filing Deadlines with the IRS Tax Calendar

The IRS's Tax Calendar for Small Businesses and Self-Employed is available for free on the IRS website. The calendar allows users to view filing and payment deposit dates for various federal income, employment and excise taxes.

Small Businesses: Apply Now to Elect to Pay Employment Taxes Annually

April 1 is the last day for a small business to request permission to file and pay employment taxes (Social Security tax, Medicare tax, and withheld income tax) only once a year, rather than once every quarter.

IRS Issues All Clear for Filing All Tax Forms

The 2012 tax filing season is now completely underway. The IRS has completed all the system adjustments triggered by the fiscal cliff legislation and is now ready to accept any and all tax forms.

New Tax Law Brings More Certainty to Estate Tax Planning

One major aspect of the recent Fiscal Cliff tax deal is that it has brought some certainty to the estate tax lifetime exemption amount. It also brought slightly higher rates and the continued availability of spousal portability.

Claiming Home Office Deduction Just Got Simpler

Many home-based businesses will be able to benefit from a new, simplified method of claiming the home office deduction, starting with the 2013 tax returns. You can claim a deduction of up to $1,500 using the simplified form, provided you meet the stringent regular and exclusive use requirements. However, make sure you don't put convenience ahead of tax savings.

Consider Incorporating to Leverage 100-percent Capital Gain Exclusion

If you own a small business, incorporating now may allow you to dispose of it tax-free in the future. But you have to act before the end of 2013.

Tax Season Opens January 30 For Most 1040 Filers [Updated]

The IRS has been scrambling to reflect retroactive changes made by the Taxpayer Relief Act of 2012 so that this year's tax season can open by the end of January. And, it has succeeded in this task for most Form 1040 filers. However, businesses that claim depreciation or the general business credit will need to wait until late February or early March.

Extended Bonus Depreciation, Expensing and Tax Credits Aim to Stimulate Business Growth

Although the individual tax provisions grabbed the headlines, the business community should be pleased to see that a number of pro-investment provisions and tax credits were extended and expanded. This article, Part 1 of our two-part series on the American Taxpayer Relief Act, discusses bonus depreciation,the expensing election (include expensing of restaurant and retail improvements) and a plethora of tax credits. Part 2 covers the tax provisions that affect individual taxpayers, including small business owners.

Tax Deal Preserves Tax Breaks for Most Americans, Targets Upper-Income Taxpayers

The fiscal cliff agreement reached late on January 1, 2013, preserves lower income tax rates for most Americans, while increasing the tax burden on upper-income taxpayers. A permanent fix to the alternative minimum tax scheme will keep millions of middle-income taxpayers from incurring AMT liability. Numerous other tax breaks, ranging from energy credits to marriage-penalty relief, were also salvaged. However, everyone is likely to feel the pain of increased payroll taxes as the two-percent reduction on the employee-share of FICA lapsed at midnight on December 31, 2012. Part One of our two-part series focuses on those provisions that will affect individual taxpayers. Part Two focuses on provisions related to businesses.

IRS Issues Withholding Tables Reflecting Fiscal Cliff Tax Deal

The IRS has issued payroll withholding tables that reflect the law changes made by the American Taxpayer Relief Act. In addition, the employee-share of Social Security taxes reverts to 6.2 percent in 2013 because the two-percent payroll tax reduction was not extended by year-end legislation. Employers should begin withholding at the new rates as soon as possible, but no later than February 15, 2013.

Medicare Surtax on Earnings Takes Effect on New Year's Day

Starting January 1, higher-earning individuals will owe an additional 0.9 percent Medicare tax on all earnings that exceed a threshold amount, which is based upon filing status. Recently issued IRS regulations provide additional information on this new tax and include guidance for employers.

IRS Provides Tax Relief to Hurricane Sandy Victims [Updated]

The IRS has announced a number of relief measures to help taxpayers recover from Hurricane Sandy. Relief provisions include the extension of filing and payment deadlines and disaster relief designations.

Annual Adjustments Issued for Retirement Plans, Wage Base and Certain Tax Provisions

Inflation over the past year triggered increases in many retirement plan contribution and benefit amounts for 2013. Plus, an upward adjustment in the Social Security wage base may impact plans whose benefit formulas are integrated with Social Security.

A Look Ahead: Be Wise When Making Charitable Contributions

Although tax savings may not be your primary motivation for helping your favorite charities, it makes sense to ensure that your contributions also help you by lowering your tax bill.

Higher Taxes May Await Investors and Businesses in 2013

This final installment in our three-part series on Taxmageddon focuses on the looming specter of increased taxes on investment income and reduced business incentives.

Individual Tax Planning Tips for Those on the Edge of the Fiscal Cliff

Part 2 of our three-part series on Taxmageddon focuses on the tax changes that affect individual tax returns, including tax bracket increases, exemption phase-outs, the marriage penalty and the new surtax on earned income. Strategies to cushion the fall off the fiscal cliff are suggested.

Forget the Zombie Apocalypse: Taxmageddon Is Far Scarier (and Likelier)

Our three-part series on focuses on the potential changes to individual and business taxes that many pundits call Taxmageddon. Part One dissects the impact on the nation, your business and your personal finances.

Certain Severance Payments Are Not Subject to FICA Taxes

FICA taxes are not due on severance payments that meet certain requirements, according to the Sixth Circuit Court of Appeals. Taxpayers in Kentucky, Minnesota, Ohio and Tennessee will want to see if the ruling applies to payments that they made or received.

Disasters and Taxes: What You Need to Know After the Crisis Passes

When your business is under 8 feet of water or blown to pieces, you probably aren't thinking about taxes. However, using the tax law effectively can help you get your financial feet back under you sooner.

A Look Ahead: Plan Now for Asset Purchases or Sales

Tax law changes slated to take effect at the end of 2013 may have a major impact on purchases and sales of assets. The amount of the expensing election will plummet, and bonus depreciation will vanish. It is critically important to analyze your plans to buy assets in order to maximize your tax savings.

Back to school? Tax Breaks for Continuing Your Education

If you are a small business owner, taking courses to improve your business skills can generate tax deductions that reduce both your income tax and self-employment tax. There's no limit on the amount you can deduct, provided all of your costs pass the test of qualified education expenses.

LLC Electing S Corp Status--The Best of Both Worlds

It isn't either/or when choosing an LLC or S corporation. You can have the best of both worlds. Structuring your business as an LLC and then electing S corporation status has long-term planning advantages and can have an immediate payoff in avoiding the new Medicare taxes starting in 2013.

Get Ready for Back-to-School Sales Tax Holidays

Although shoppers in 17 states can save some money by taking advantage of upcoming back-to-school sales tax holidays, these holidays are anything but a vacation for retailers. Here are six steps retailers should take to make the sales tax holiday less stressful.

Tapping Into Tax Incentives for Hiring Veterans

Hiring veterans is not only a fairly safe bet that you're including highly self-disciplined, ambitious talent into your workforce, but it can also provide some bang for the buck through tax credits and incentives. Find out which ones your business can take advantage of.

Plan Now to Reduce New Tax on Investment Income

High-income taxpayers face a 3.8 percent tax on unearned income beginning in 2013. Now is the time to evaluate your investments and develop a strategy to achieve your goals while reducing your tax liability.

Act Now to Minimize Impact of Increased Medicare Tax on Wages

To pay for the new health care reform law, high-income taxpayers will owe additional Medicare tax on wages and self-employment income above a threshold amount beginning in 2013. Now is the time to consider strategies, such as incorporation, to lower your exposure to this new tax.

Health Care Decision Reaffirms Numerous Tax Increases for 2013

An increased threshold to claim medical expenses and a decreased flexible spending contribution amount are among the individual tax provisions left standing when the U.S. Supreme Court upheld the Patient Protection and Affordable Care Act.

Calling a Payment a Tip Doesn't Make It a Tip

The IRS is on the lookout for service charges that are being incorrectly characterized as tips. The special payroll tax rules that apply to tip income do not apply to service charge income. In certain cases where business practice or system changes are necessary to apply the rule, the rules will be applied only for charges after December 31, 2013.

Health Insurance Will Be Mandatory Beginning in 2014

Every American will be required to have a mimimum level of health coverage beginning in 2014 unless they can demonstate they are exempt from the coverage requirement. A penalty can be imposed on each person who fails to have the required coverage.

Employees: Don't Miss Out on Key Business Expense Deductions

Many employees have work-related expenses that aren't reimbursed by their employers. If this describes you, then you will want to know the rules for deducting those expenses on your tax return.

Payroll Tax Reduction Extended through 2012

The 2-percent, employee-side payroll tax cut will remain in effect until the end of the year as a result of legislation signed into law on February 22, 2012. The IRS has revised Form 941 to reflect the new law.

IRS Provides Quick Reference Guide for Small Businesses

A new federal quick-reference guide can help you stay on top of tax obligations for small business owners.

Tax ID Theft Victims Should Get IRS-Issued PIN

The IRS is providing a six-digit identity protection personal identification number (IP PIN) to victims of tax-related identity theft who have had their identities verified by the IRS. Obtaining and using an IP PIN will help avoid delays in processing federal income tax returns.

Natural Disasters and Taxes: What You Need to Know

When your business is under 8 feet of water or blown to pieces, you probably aren't thinking about taxes. However, using the tax law effectively can help you get your financial feet back under you sooner.

Expanded Form 1099 Reporting Repealed

Burdensome tax information reporting requirements on small businesses instituted by the controversial health care reform law have been eliminated, avoiding a costly regulatory nightmare.

IRS Makes Checking on Tax Refunds Easy

You can check the status of your tax refund online, by telephone, or by using IRS2Go on your mobile device.

Sales Tax Takes a Holiday

Retailers need to be prepared in the 16 states offering back-to-school sales tax holidays to motivate late-summer shopping.

Summertime Child Care Expenses May Qualify for a Tax Credit

School's out for the summer! While most children rejoice, many working parents have to scramble to find day care. Although it won't make finding care easier, tax credits may help offset the cost of summer camp or in-home day care.

Protect Yourself When Mailing Tax Officials

There are only a few accepted methods of safely communicating by mail with the IRS.

Bonus Depreciation Rules Clarified for Luxury Autos

The interaction between 100 percent bonus depreciation and the IRS's luxury automobile rules is complex, so the IRS is hoping to clear up any confusion.

Verify Organization's Tax-Exempt Status Before You Donate

Before donating to a charity, verify that its tax-exempt status was not automatically revoked because it didn't file annual returns with the IRS.

IRS Cautions: Bartering Transactions Are Taxable Transactions

Swapping goods and services generates taxable income in the eyes of the IRS.

Child's Unearned Income Can Trigger 'Kiddie Tax'

A child's unearned investment income may be taxed at the parents' tax rate, rather than the lower rate that would probably apply if the income was taxed to the child.

Last Minute Deadline Blues? Extend Your Filing Due Date Until October 15

If you don't think you can get your tax return filed by April 17, file Form 4868 to extend the filing deadline to October 15.

Use of Employer-Provided Mobile Phones Is Non-Taxable Fringe Benefit

An IRS ruling makes the business use of cell phones a less taxing affair.

Employers Protected from Lawsuits When Honoring IRS Levies

An employer that withholds money from an employee's wages in response to an IRS levy is protected from legal liability, even if the employee successfully challenges the levy in court.

Outsourcing Payroll Duties Relieves Workload, But Not Tax Responsibilities

Using a payroll service can reduce the aggravation associated with your employment tax responsibilities, but you remain responsible for ensuring that the obligations are actually met.

Don't Overlook the Small Employer Health Care Tax Credit

Small businesses owners who offer health insurance may be able to get a tax credit for doing so. See if you qualify.

IRS Makes Voluntary Reclassification of Workers Less Taxing

Misclassifying a worker as an independent contractor, rather than an employee, is one of the more costly mistakes a business owner can make. A new program launched by the IRS can help make correcting that mistake a bit less expensive.

You've Received a Notice from the IRS: Now What?

An IRS Notice can strike fear into even the bravest of hearts. Ignoring the issue only leads to more troubles, so rip open that envelope and take action.