Estate tax surprises at state level Recently passed federal legislation increased the exemption amount before your estate pays taxes on your assets when you die. The amount for 2013 is $5.25 million. This makes most of our estates tax-free when we die. Or does it? Where you live could cost you a bundle in inheritance and estate taxes since 21 states have some form of estate taxes, inheritance taxes, or
Don’t be surprised at tax time When it comes to retirement many Americans believe they can count on their full Social Security benefits as a core element of income. You can imagine the surprise at tax-time when some of these same benefits are returned to the Federal Government in the form of benefit reduction and taxation. Here is what you need to know. Social Security and Retirement Benefits can be
Beginning in 2013 there is a simplified way to take a home office expense for a portion of your home. This new ‘safe-harbor’ option greatly simplifies how to record valid expenses for business use of your home. Here is how it works. •   You may opt to take your office space square feet times $5 and use this as a valid home office expense up to $1,500 (300 sq. ft.).
You have until the end of January, 2013 to act Looking for a way to reduce your 2012 income? Those who are older than 70 1/2 have an opportunity to make charitable contributions from their qualified individual retirement accounts and have it excluded from 2012 income. Here is what you need to know. In Section 209 of the recently passed tax legislation there is a provision for qualified seniors to
Here is the late breaking news During the wee hours of January 1, 2013 the final touches were made to 2012 tax laws. While the rest of us could not realistically make plans during 2012 for laws passed in 2013, perhaps there is a clause or two that may help you when you file your taxes in the next few months. Here is what you need to know: Alternative
Know your new take-home pay. When you receive your initial paycheck for 2013 you had better take a close look to see what the payroll department has done with your pay. If you do not, you may be in for a big tax bite at the end of the year. Background For years the Social Security tax was set at 12.4% of your earnings. 6.2% of the obligation was paid
How to ensure your business is not deemed a hobby You’ve loved dogs all your life so you decide to breed them and start a dog training business. Is this a business in the eyes of the IRS or a hobby? Knowing what the IRS is looking for and properly positioning your small business can save taxes and headaches if you are ever questioned by the IRS. Why should
What to do about your need for documentation Year-end is a good time to ensure you have proper documentation to substantiate your tax deductions. This is important as many banks start deleting online documentation that is over one year old. Background Two things have happened over the past ten years that have greatly reduced the ability to have a canceled check as proof when the auditor comes calling. The first
The IRS recently announced mileage rates to be used for travel in 2013. The Business, Medical, and Moving mileage rates increase one cent versus 2012. Unfortunately, the rate to be used for Charitable travel is unchanged because updates in this area require Congressional action. Remember to create and keep a detailed log of your applicable mileage for your qualified business, medical, moving and charitable driving. Without this documentation, your qualified
Sometimes big IRS related terms can mean BIG trouble If you have problems getting to sleep at night and you turn to the IRS tax code for help, you might find some vocabulary that is very foreign to words you use every day. One of the more common words used by the IRS is the term “contemporaneous”. So what does it mean and why should you care? Contemporaneous Defined According
