Tag Archives: tax savings

Tax Season Update

Posted on
by

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.

Payroll Tax Cut Extension

Posted on
by

On February 17th, Congress passed the “Middle Class Tax Relief and Job Creation Act of 2012” and sent it to President Obama for his signature.  The act extends the 2% payroll tax cut through then end of 2012, assuring most Americans don’t see a 2% cut in their take home pay.

The act extends a prior stimulus measure which cut the amount each employee contributed to the Social Security fund by 2%.

IRS Updates for 2012

Posted on
by

The IRS announced December 12th that the standard mileage rate used for businesses will stay at the current level of 55.5 cents per mile for 2012.

In addition, personal and dependency exemptions on the personal return will be worth $3,800 each, and each of the standard deductions moved slightly higher as well.  Also, the maximum amount of wages subject to Social Security taxes will move up $3,300, to $110,100 per person.

Debate continues to rage on extending the payroll tax holiday currently in place.  We’ll stay tuned to the latest coming out of Washington.

Year-End Tax Planning for Business

Posted on
by

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.