TMTW #89 – It is “OK” to File an Extension

Posted on April 17, 2012 by taxblogger

Tax and Money Tip of the Week
It is “OK” to File an Extension
April 17th, 2012 | No. 89

Submit Extension Form 4868

If you haven’t filed your tax return by now, you should probably consider filing for an extension.  

To file for an extension, you simply need to submit Form 4868.  Submitting this form will give you until October 15th of that year to file your returns. However, an extension of the time to file is not an extension of the time to pay.  If you think you will owe taxes, you must send a payment along with the extension.  This applies for your federal and state tax returns. 

Here is a link to Form 4868:
Form 4868

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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TMTW #88 – New Roth IRA Idea

Posted on April 11, 2012 by taxblogger

Tax and Money Tip of the Week
New Roth IRA Idea
April 11th, 2012 | No. 88

New Roth IRA Idea

Below is a great article from Investor’s Business Daily regarding IRAs, click on the link below to read it.
 
Roth IRA Tactic for the Affluent  
 
Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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TMTW #87 – Good Communication is Key to Lowering Your Taxes

Posted on April 4, 2012 by taxblogger

Tax and Money Tip of the Week
Good Communication is Key to Lowering Your Taxes
April 4th, 2012 | No. 87
 

Good Communication is Key to Lowering Your Taxes

After over 30 years in the tax business, I continue to find that good communication with the CPA is the key to lowering taxes.
 
Solid bookkeeping for your business enables you to take the most deductions possible
while minimizing taxes.
 
Mid-year tax planning also helps plan and keep up with your current taxes,  prevents unwanted surprises, and saves a lot of taxes for our clients each year.
 
We appreciate all of our clients and thank you for your business again this tax season as the tax season winds down.
  
 
Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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TMTW #86 – New $50,000 Business Deduction for N.C. Businesses in 2012

Posted on March 28, 2012 by taxblogger

Tax and Money Tip of the Week
New $50,000 Business Deduction for N.C. Businesses in 2012
March 28th, 2012 | No. 86
 

New $50,000 Business Deduction for N.C. Businesses in 2012 

For tax years beginning on and after January 1, 2012, N.C. General Statute 105.134.6(b)(22) provides a deduction in calculating North Carolina taxable income equal to “An amount not to exceed fifty thousand dollars ($50,000) of net business income the taxpayer receives during the taxable year. In the case of a married couple filing a joint return where both spouses receive or incur net business income, the maximum dollar amounts apply separately to each spouse’s net business income not to exceed a total of one hundred thousand dollars ($100,000). For purposes of this subdivision, the term ‘business income’ does not include income that is considered passive income under the Code.”
 
1. What is “Business Income?” As we understand it, the NC Department of Revenue is currently considering “business income” to include Schedule C, Schedule F, and Schedule E income as long as the income is not “passive income.”
 

  • Does business income include rental income reported on Schedule E (whether owned by the taxpayer individually or owned through a partnership or a S corporation)? The NC Department of Revenue is considering an answer to this question.
  • Does business income include W-2 wages paid to an S corporation owner? Representatives of the NC Department of Revenue have suggested that W-2 wages paid to anyone (including S corporation owners) will not constitute “business income.”

2. When is Business Income “Passive?” General Statute 105.134.6(b)(22) provides that the $50,000 deduction does not apply to income that is “considered passive income under the Code.” The NC Department of Revenue is currently considering an answer to this question.

I will keep you informed as the North Carolina Department of Revenue provides additional information concerning this important new deduction for 2012.
  
 
Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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No TMTW This Week

Posted on March 21, 2012 by taxblogger

No Tax and Money Tip this Week
March 21st, 2012  

No Tax and Money Tip This Week

There will not be a Tax and Money Tip this week.  We are busily crunching tax returns and will continue next week with another Tax and Money Tip of the Week. We hope everyone is having a happy tax season.

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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TMTW # 85 – Revised Rules for Reporting Sales of Capital Assets

Posted on March 14, 2012 by taxblogger

Tax and Money Tip of the Week
Revised Rules for Reporting Sales of Capital Assets
March 14th, 2012 | No. 85
 

New Form and Rules for 2011

When you sell stocks, mutual funds or other capital assets  you will  still report the gains or losses on Form Schedule D when you prepare your 2011 tax return.  But this year you must first show the sales activity on a new form—Form 8949 .

 
This new form is where you show:  description of property, date acquired, date sold, sales price and cost basis.  Of particular note, however, you must also check a box indicating if the long- term or short-term cost basis is (A) reported to the IRS on Form 1099-B, (B) cost basis is not reported on Form 1099-B, or (C) when you cannot check Box A or B (when proceeds are not reported on a Form 1099-B).
 
A separate Form 8949 should be completed, grouping all transactions by type (Box A, Box B or Box C) and also by short-term or long-term trades.
 
The summary information from Form 8949 then flows to the revised Form Schedule D. 
 
This new form was created as a result of the new cost basis reporting requirements for brokers.  The new Form 8949 will help the IRS  better compare your reporting with the brokers, Form 1099-B statements.  It also opens an easy audit target when you show asset sales where the cost basis is not reported on a Form 1099-B.  Be prepared to substantiate cost basis calculations if you mark boxes B or C on Form 8949.
 
Check with your broker to determine if they have their basis.  If not, take steps to determine the basis and update their records.
 
We will let you know about other tax law changes in the coming weeks.

 
Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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TMTW # 84 – Tax Season Tax Saving Hint

Posted on March 7, 2012 by taxblogger

Tax and Money Tip of the Week
Tax Season Tax Saving Hint
March 7th, 2012 | No. 84
 

Don’t Forget the Education Credits and Deductions!
 
Our firm is in the heat of the tax season and we are busy saving our clients money.
 
We already have had several tax returns in which we saved thousands of dollars for our clients by optimizing Education Credits or Deductions.
 
If you have a child going to college or if you or your spouse has gone back to college,
check out the archives of my Tax and Money Tips of the Week, November, 2011.
 
Click here:
https://taxandmoneyblog.com/2011/11/
 
Call us and  let us help save you taxes and legally take advantage of the tax laws for you.

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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TMTW # 83 – President Signs Payroll Tax Cut Extension Bill; New Form 941 Released

Posted on February 29, 2012 by taxblogger

Tax and Money Tip of the Week
President Signs Payroll Tax Cut Extension Bill; New Form 941 Released
February 29, 2012 | No. 83

On Wednesday evening at the White House, President Barack Obama signed into law the Middle Class Tax Relief and Job Creation Act of 2012, H.R. 3630.  On Thursday, the IRS released a revised Form 941, Employer’s Quarterly Federal Tax Return, to reflect the extended payroll tax cut.

The act extends the 4.2% rate for the employee portion of Social Security tax through the end of 2012.  It also extends certain unemployment benefits and blocks a cut in Medicare payments to doctors.  The act also repeals earlier-enacted shifts in the timing of corporate estimated tax payments.

A 2% recapture tax enacted in the December legislation that extended the payroll tax cut through Feb. 29th, which effectively capped the amount of wages eligible for the payroll tax cut at $18,350, was also repealed by the act.
Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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TMTW # 82 – Encourage your Senators to Vote to Protect Inherited IRAs

Posted on February 22, 2012 by taxblogger

Tax and Money Tip of the Week
Encourage your Senators to Vote to Protect Inherited IRAs
February 22, 2012 | No. 82
 

Inherited IRAs- How to Contact your Senators

Last week, I encouraged all of you to write to your Senators regarding proposed changes to IRAs. Here is a link to do so from the Financial Services Institute:

http://www.bipac.net/issue_alert.asp?g=FSI&issue=highway_1813&parent=FSI

This bill would no longer permit tax deferred stretches of IRAs for beneficiaries other than a spouse, minor children, or the disabled. Adult children would only be permitted a five-year window to defer.

Overall, this bill would require beneficiaries to pay taxes on inherited IRAs over five years instead of spreading them over their lifetime. If passed, the provision would apply to deaths after December 31, 2012.

If you decide to contact your representative, follow the link above and let them know you want your inherited IRAs protected. 
 
Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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TMTW # 81 – Big Potential Tax Increase/Hit to Retirement Plans

Posted on February 15, 2012 by taxblogger

Tax and Money Tip of the Week
Big Potential Tax Increase/Hit to Retirement Plans
February 15, 2012 | No. 81

Congress Considering Major Change for IRAs

 

In the latest transportation funding bill, Congress is considering eliminating Stretch IRAs for people who have a properly designated individual beneficiary on their primary or secondary beneficiary designation form of their IRAs.
 
See the following:
 
http://www.forbes.com/sites/deborahljacobs/2012/02/08/congress-may-crush-key-tool-for-ira-inheritors/
 
 
Hopefully there will be a great public outcry against this legislation since we all will need our retirements to last longer in our golden years. If you so decide, contact your representatives.
 
Keeping you informed..
 
 
Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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