2012 Taxpayer Relief Act Changes to Alternative Minimum Tax
As you know, the alternative minimum tax (AMT) traps more middle income taxpayers every year. To partially alleviate this tax burden, Congress has been enacting annual “patches” to the AMT to increase exemption amounts. The American Taxpayer Relief Act of 2012 (2012 Taxpayer Relief Act) provides immediate relief for the AMT by permanently increasing the AMT exemption amounts retroactive to the 2012 tax year. Beginning in 2013, these base AMT exemption amounts will be adjusted annually for inflation.
For 2012, the exemption amounts are increased to $78,750 for married couples filing jointly and surviving spouses, $50,600 for single taxpayers and heads of households, and $39,375 for married individuals filing separately.
2012 Taxpayer Relief Act For Individuals
2012 Year End Tax Planning for Individuals
Year-end tax planning is always complicated by the uncertainty that the following year may bring. Even with the election behind us, 2012 is one of the most challenging in recent memory for year-end tax planning. A combination of events – including possible expiration of some or all of the “Bush-era” tax cuts after 2012, the imposition of new so-called Medicare taxes on investment and wages, doubts about renewal of tax extenders, and the threat of massive across-the-board federal spending cuts – have many taxpayers asking how can they prepare for 2013 and beyond, and what to do before then. The short answer is to quickly become familiar with expiring tax incentives and what may replace them after 2012 and to plan accordingly.
2013 Year-End Tax Planning for Individuals
Early in 2013, the 2012 Taxpayer Relief Act was enacted and the “Bush-era” tax cuts, which were scheduled to sunset at the end of 2012, were permanently extended and modified. This legislation is significant because without its enactment, individual tax rates on all income groups would have increased, taxpayer-friendly treatment of capital gains and dividends would have disappeared, and many other popular but temporary incentives would no longer be available.
2016 Year-End Tax Planning for Individuals
Although tax planning is a 12-month activity, yearend is traditionally the time to review tax strategies from the past and to revise them for the future. Yearend has also become a time when there is an increasing need to take a careful look at what’s changed within the tax law itself since the beginning of the year. Opportunities and pitfalls within these recent changes – as they impact each taxpayer’s unique situation—should not be overlooked. This is particularly the case during year-end 2016. Here are some of the many consideration that taxpayers should review as year-end 2016 approaches.
Accurately Complete Your Organizer
Your Organizer is basically a filing template that ensures that we have the information that we need. It is tailor made to each of our clients and often shows data from the last period's return for reference.
By taking the time to confirm you have all of your source documents—or at least discover what you need to attain—you ensure the accuracy of your return, and minimize your expense.
Deadline for 1040s
Deadline for filling personal tax return, or an extension must be filed.
Should the date fall on a weekend or holiday, it extends to the next workday.
Deadline for Extended 1040s
Federal & State Income Tax Preparation
“The hardest thing in the world to understand is the income tax”
- Albert Einstein
Fifty states, and fifty ways of doing things. Plus the complexities of doing business in multiple states? Not a problem—we've been doing it for years and have clients throughout the country. We're not interested in restricting our boundaries and neither should you.
Federal Tax Preparation & Planning
"If I had six hours to chop down a tree, I'd spend the first hour sharpening the ax."
- Abraham Lincoln
Being prepared for an upcoming tax deadline is relieving, saving you time and money. Additionally, with our premier Tax Preparation & Planning you can intelligently position your assets so you can maximize growth and minimize expense. We've been providing these services for over 35 years to businesses, individuals, and other CPAs who depend on our experience, knowledge, and contacts.
Individual or Joint 1040 Tax Preparation Engagement Letter
This form outlines the terms of an individual tax engagement, our responsibilities as the preparer, and yours as the taxpayer. An engagement letter needs to be signed before your tax return may be prepared.
IRS Depreciation Deduction Limitations & Lease Inclusion Amounts - 2013
The IRS has issued the depreciation deduction limitations and lease inclusion amounts for vehicles purchased or leased in 2013. In general, there are two methods for computing vehicle expenses, the standard mileage rate (56.5 cents per mile for 2013; 55.5 cents per mile for 2012) or the actual expense method. If you use the standard mileage rate method you may not depreciate your car or deduct lease payments. If you use the actual cost method, you may take deductions for depreciation or lease payments, registration fees, licenses, gas, insurance, oil, repairs, garage rent, tolls, tires and parking fees.
Keep Business Accounts & Personal Accounts Separate
Commingling Funds is more than messy accounting—it is dangerous.
Paying personal bills, cashing checks to yourself when they were written to your business, or having shared bank accounts is an abuse of your corporate entity and may remove the protection of limited liability.
Preparing for Health Care Reform
On June 28, 2012, the U.S. Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act (PPACA), and its companion law, the Health Care and Education Reconciliation Act of 2010. As part of its primary purpose to facilitate health care reform, the PPACA includes key tax provisions that affect individuals and businesses. Now that the Supreme Court has ruled, all must prepare to comply with the requirements under PPACA. Some requirements are already in effect, while other provisions apply starting in 2013 or later. As your CPA firm, we are here to help you plan for the future.
Proposed Regulations on Net Investment Income Tax and Additional Medicare Tax
The IRS has issued long-awaited and much needed proposed reliance regulations on the operation of the two new surtaxes imposed under the 2010 healthcare legislation: the 3.8 percent Net Investment Income Tax (NIIT), and the 0.9 percent Additional Medicare Tax. Both surtaxes are scheduled to come into full effect on January 1, 2013. The proposed reliance regulations and the frequently asked questions on the IRS website attempt to address many of the gaps in the application of these surtaxes that have been questioned by tax professionals, employers, and taxpayers. The guidance on each of these surtaxes is extensive and is immediately critical for affected taxpayers.
Sarasota's Real Estate Market & The Tax Benefits of Home Ownership
Buying a home is the single most valuable investment many families make, and home ownership offers tax breaks that make it the foundation for your overall tax planning. The gulf coast of Florida's real estate market (specifically Sarasota's, Bradenton's, North Port's, & Venice's markets) was hit hard with some strong correction after the bubble. As a CPA Firm in Sarasota, Florida, we have been helping our clients deal with the effects, but also have seen improvements as home values have increased.
If you are undecided as to a purchase or sale, it is important to know that the tax law provides numerous incentives to home ownership, including the following:
Tax Consequences for Self-Employed Individuals
Owning your own business can be very rewarding, both personally and financially. Being the sole decision-maker for this important undertaking can also be overwhelming. Business owners have many choices to make, and these choices involve tax consequences that are not always foreseen. We can help you minimize your overall tax burden by identifying and maximizing business deductions, providing guidance on substantiation of expenses, and exploring tax planning alternatives that are uniquely available to the self-employed.
Tax Planning For High Income Tax Payers
We know that you have worked hard for your money and would like to reap the benefits to the greatest extent possible. Your ultimate goal is to sustain a successful wealth-building strategy while avoiding unnecessary and expensive tax consequences. We are interested in helping you achieve these objectives.
For the last few years, there has been talk of major tax reform that would place an increased tax burden on higher income individuals. Included in these discussions is the so-called “Buffet Rule,” which would impose a minimum tax rate of 30 percent on adjusted gross income (AGI) over $1 million. Most tax professionals predict that tax reform has little chance of becoming law in 2014, but it is wise to weigh your options carefully with higher tax rates looming on the horizon.
The Earned Income Credit
The American Taxpayer Relief Act of 2012 (American Taxpayer Relief Act) makes permanent or extends enhancements to the earned income tax credit (EITC) provided by Bush-era and subsequent legislation. These enhancements include a simplified definition of earned income, reform of the relationship test and modification of the tie-breaking rule.
The EITC is a tax credit to help you keep more of what you earned. It is a refundable federal income tax credit for low to moderate income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.
Vehicle Depreciation and Deductions
In general, if you use your vehicle in pursuit of a trade or business, you are allowed to deduct the ordinary and necessary expenses incurred while operating the vehicle. However, any expenses associated with the personal use of the vehicle are not deductible. For purposes of these deductions, "car" includes a passenger vehicle, van, pickup or panel truck.
Personal vs. business miles. Business use of your car can include traveling from one work location to another work location within your tax home area; visiting customers; attending a business meeting away from the regular workplace; and traveling from home to a temporary workplace if you have one or more regular places of work. The costs of travel between home and a regular place of work, however, are nondeductible commuting expenses.