Tax season moves quickly, and at the end of this week, there will be a short four weeks left until the individual tax deadline is upon us. There have been a number of developments since our last posting, so below you’ll find some of the highlights you may have missed.
The IRS has gotten its computer systems up to date with the “Fiscal Cliff” legislation, passed in early January. This means all tax returns can now be filed, as the final forms have been released, and tax software providers have gotten their updates in place. This is a full three weeks faster than anyone expected.
Intuit, the maker of TurboTax, as well as several professional-grade tax software programs, ran into significant issues with the Minnesota tax return, leading to about 10,000 tax returns being delayed. Intuit had until today to get the issues corrected, and says they have notified anyone who was affected. We use a different software provider. This is a great example of the importance of having a tax professional working for you – the software can’t always be trusted to get the right result.
Governor Dayton removed the “business to business” sales tax from his proposed budget, which is great news. If left in place, professional services, like accounting and legal services would have been subject to sales tax.
The Standard Mileage Rate for business miles driven in 2013 is 56.5 cents per mile.
Corporate taxes are due by this Friday, March 15th, and as always, we’re here to help with your tax and accounting needs.
This time of year we start talking to our clients about tax planning, but this year things are taking a somewhat different twist. With the November elections still to be determined, and additional parts of the Affordable Care Act going into effect in 2013, below are a couple of new things we’re thinking about this planning season.
Are you considering selling stocks, bonds, or investment real estate at a considerable gain? If so, you may want to consider doing it at the end of 2012, because in 2013, you may find yourself paying an additional 3.8% tax on those gains.
If you own a business, are you considering a bonus for yourself? If so, doing that in 2012 may save you from paying an additional .09% in Medicare tax which goes into effect for certain taxpayers in 2013.
If you’re under age 65, it may pay to push as many deductible medical expenses into 2012 as possible, as less of them will be deductible in 2012.
These are just a few of the items in the wind for the end of this year. If you’re a client of ours, expect to see a tax planning letter with even more ideas in the coming weeks.
As year end approaches, we’re doing more and more tax planning for our clients. We’re often asked what they can do within their business to reduce the tax burden for this year. Below are a few points to consider as we enter the final months of the year.
If you’re an accrual basis taxpayer (we can tell you if you don’t know), most employee bonuses based on 2011, but paid in the first two and a half months of 2012, can be deducted in 2011. They will be picked up by the employee when paid 2012.
In addition, if you’re an accrual basis taxpayer, be sure that any customer deposits or down payments for products or services delivered after 12/31/11 are not included in income.
Seek to maximize depreciation deductions by puchasing necessary equipment in 2011, as many of the accelerated depreciation allowances are set to expire at the end of this year unless Congress renews them.
We have many more great ideas for tax savings, which can be a great gift to yourself as we approach the holiday season.
To keep pace with inflation, the IRS modified dozens of tax benefits for 2012. For example, the value of each personal and dependency exemption for most taxpayers will be $3,800, an increase of $100 over 2011. In addition, the standard deduction will be $11,900 for married couples filing a joint return, $5,950 for singles and married individuals filing separately, and $8,700 for heads of household.
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