Blog
23
2012
Posted in General
2011 TAX UPDATE
INDIVIDUAL
Residential Energy Efficient Property credit not
only includes your primary residence but your rental properties as well.
Major form changes to Schedule D (capital
gains/losses) - the new schedule D will summarize individual stock transactions
and the details will be reported on the new Form 8949. The new form has two
pages, one for short-term and one for long-term transactions and it will have 3
checkboxes on each page to indicate the following:
- Capital gains and losses when
the cost basis has been provided on Form 1099
- Capital gains and losses when
the cost basis has not been provided on Form 1099
- Capital gains and losses when
there is no Form 1099
As such, some taxpayers need to file up to three
forms 8949.
Gold is generally taxed as a collectible at 28%
federal. Exception: unless you are buying stock or mutual fund that is invested
in the gold industry.
Jewelry parties and gold buyers - the partygoers are
generally not in the business of selling gold, so gains on the sale is taxed as
collectible (28% federal) and losses are personal and not deductible.
Capital gains and qualified dividends can be
tax-free through 2012 - if your tax bracket falls between 10% - 15% then you
pay no capital gains and qualified dividends up to tax year 2012.
Social security stops mailing benefits statements in
an effort to reduce cost. It was suspended last April, 2011 and will resume in
2012. The paper statements will only be sent out to taxpayers who are age 60
and older. Everyone else will have to visit the SSA's Online Retirement
Estimator Web site to access this information. (www.ssa.gov/estimator)
Net operating loss for 2011 - you can either do a
two-year carryback or do a 20-year carryforward.
Renting out the primary residence - the basis when
you convert the primary residence to a rental is the lesser of the adjusted
basis of the property or the fair market value. The amount you show as a basis
on the return is the basis you use upon sale of the converted residence.
Beginning with the 2012 income taxes, the state
Franchise Tax Board will require taxpayers to breakdown their property taxes
into deductible and non-deductible portions.The portion that is deductible
includes the tax rate. The section which includes Mello-Roos fees and other
special assessments, is not deductible.
Federal refunds may go to FTB - The FTB participates
in the Treasury Offset Program, a debt collection program where federal refunds
are intercepted for payment of past-due CA income tax debts. This means the IRS
will reduce any federal refund by unpaid FTB tax debts. The FTB will also
charge $21 fee for each federal refund intercepted.
The CA state controller's office (SCO) is currently
in possession of more than $6.1 billion in unclaimed property belonging to
approximately 17.6 million individuals and organizations. If you want to check
if you have any unclaimed property, please go to http://scoweb.sco.ca.gov/UCP
or www.naupa.org
Under the 2010 HIRE Act, any individual who, during
the tax year, holds an interest in a "specified foreign financial asset"
must attach Form 8938, Statement of Specified Foreign Financial Assets to his
or her income tax return for that tax year if the individual's specified
foreign financial assets exceeds as follows:
* Unmarried or married filing separate living in
the U.S.: More than $50,000 on the last day of the tax year or more than
$75,000 at any time during the tax year.
* Married filing joint living in the U.S.:
More than $100,000 on the last day of the tax year or more than $150,000 at any
time during the tax year.
* Unmarried living abroad: More than $200,000
on the last day of the tax year or more than $300,000 at any time during the
tax year.
* Married filing joint living abroad: More
than $400,000 on the last day of the tax year or more than $600,000 at any time
during the tax year.
The penalty for failure to disclose is $10,000 and
cannot exceed $50,000.
BUSINESS
Quickbooks audit - the IRS is now including a
paragraph about Quickbooks in their information request. They require for an
ORIGINAL electronic backup file.
1099-K - starting 2011, IRS requires all businesses
that process credit card and electronic payments to send a Form
1099-K to sellers with more than 200 transactions
and $20K gross income paid to them.
Bonus depreciation for qualified luxury automobiles
- the first year bonus depreciation is $8K. However, in order to qualify, the
original use of the auto begins with the taxpayer.
Heavy SUVs are allowed a maximum of $25K of section
179 depreciation expense in 2011. However, taxpayers can still claim a 50%
bonus depreciation.
Net operating loss for 2011 - you can either do a
two-year carryback or do a 20-year carryforward.
Start-up cost for new business - for 2011, the
start-up cost is reduced back to $5K and the balance can be deducted over 15
years.
Credit for retained workers (HIRE act) - employer
can qualify for a credit of up to $1,000 if that worker is retained as an
employee for at least 52 weeks.
Small Employer Health Insurance Credit - employer
can be eligible for credit if they provide health coverage to their employees.
The credit can be as high as 50% of premiums paid but is phased down based on
the number of employees and average annual wage.
Business return late filing penalties - federal late
filing penalties for LLC and S-corporations have skyrocketed almost 300% over
the last 3 years. The penalty is now $195 time the number of partners or
shareholders. The maximum penalty for a one-shareholder is $2,340 ($195 x 12
months). For CA, it's $18 (maximum 12 months).
Form 1099 "failure-to-file" penalty - $100
per form before the required filing date
California's Amazon bill - the bill's implementation
was delayed waiting for Congress to enact a federal law. The Amazon bill was
designed to require online retailers to charge sales tax on purchases shipped
to CA. If Congress does not enact a law, the CA's 2011 Amazon law would become
effective on September 15, 2012.
Last Updated by Admin on 2012-01-23 14:23:21
13
2011
Posted in General
The IRS today announced optional standard mileage rates for 2012
(IR-2011-116):
- 55.5 cents for business miles
- 23 cents for medical and moving miles
- 14 cents for charitable miles
The rate for business miles is the same as the last half of 2011. The medical and moving rate has been reduced by 0.5 cents per mile.
California conforms to these amounts.
Last Updated by Admin on 2011-12-13 11:34:18
13
2011
Posted in General
This is the home of our new blog. Check back often for updates!
Last Updated by Admin on 2011-12-13 11:24:09