Showing posts from November, 2011

Changes in 2012

For tax year 2012, personal exemptions and standard deductions will rise and tax brackets will widen due to inflation. By law, the dollar amounts for a variety of tax provisions, will affect every taxpayer, must be revised each year to keep pace with inflation. A new dollar amount will effect returns in 2012, filed by most taxpayers in early 2013, include the following: -The value of each personal and dependent exemption, available to most taxpayers, is $3,800, up $100 from 2011. -Standard deductions for married couples filing joint returns will go up $300 from the 11,900 it is. It will also go up $150 for those who file single or married filing separately and nearly $200 for those who file head of Household. Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes. - The tax-bracket thresholds will increase in each filing status. Credit, deductions and other disc


The IRS announced that there are 738,000 tax return preparers who must renew their Preparer Tax Identification Numbers (PTINs) before January 1, 2012.  They must do it before the year begins. Preparers who used paper applications to receive their PTINs will receive an activation code in the mail from the IRS which they can use to create an online account to convert to an electronic renewal for 2012. Individuals can also renew by using a paper Form W-12  PTIN application. Yet  renewing electronically avoids a four to six week wait  for processing the renewal request. There have been changes made for the upcoming 2012 tax season that will include: - Return preparers must self-identify that they are supervised preparers or Non-1040 preparers. - Supervised preparers will need to provide a supervisor PTIN when applying or renewing their PTINs. - Credentialed preparers (certified public Accountants, attorneys, unrolled agents) must provide the expiration date for their license when they appl


The IRS employees will explain and protect your rights as a taxpayer throughout your contact with them. They will not disclose to anyone the information you give them, except as authorized by law. You have the right to know why the IRS is asking you for information, how they will use it, and what happens if you do not provide requested information.  If you believe an IRS employee has not treated you in a professional manner, you should ask for a supervisor or write the IRS director.  Should you ever get audited, you have the right to represent yourself or with proper written authorization, have someone else represent you. Your representative must be a person such as an attorney, enrolled agent or certified public accountant, or someone allowed to practice before the IRS. IRS expects you to be responsible for and to pay only the correct amount tax that owe.  If you can not pay the amount in full you may qualify for monthly installment  payments.   If you disagree with IRS about you ta


 The IRS has created a new outreach that will remind employers about upcoming extensions and deadlines. They will also provide details on other important information about credits, including:  - Businesses who have already filed and later determine they are eligible for the credit, they can always file an amended return such as form 1120X or 1040X  - Businesses without tax liability can still benefit. The small business job act of 2010 provided that for 2010 and after eligible small businesses may carry back unused general business credits (including the employer health care tax credit) from about 5 years. Small businesses who did not have tax liability should evaluate their eligibility for the small business tax credit.  -Businesses that couldn't use the credit in 2010 can claim it in the future years.  “Many Businesses”  Businesses that are locked into a health insurance plan for 2010 may not have the opportunity to make any needed adjustments to qualify for the credit for 2010.


The Foreign Account Tax Compliance Act has required that certain U.S. taxpayers that have foreign financial assets with an aggregate value exceeding 50,000 is to report information about those assets. A new form has been created (Form 8938) and it must be attached to the taxpayers tax return. You must report the assets for the taxable year starting March 18, 2010 and after. The failure to report foreign financial assets can result in a penalty of $10,000 or more.  As well as underpayment of tax attributable to non-disclosed foreign financial assets will be subject to an additional 40% penalty.  


Many people every year consider opening up a business, yet have no business plan or don't know where to start. When considering opening up a business you must realize the effort and strategy that goes into it. There are questions that one needs to ask himself. 1. What does success look like?    People naturally think that success in business is measured by growth and profit. But in contrast it's also measured by consistency and having some money in the bank. Also, keeping up to date on taxes is a big ordeal when owning a business.  The IRS is not hesitant to put a levy on your business bank account until your taxes are paid and depending on how you maintain your corporation it may also affect your personal bank account. Success is keeping up with the tax laws and being consistent in your profits. 2.  What approach do you want to use in managing your business?  Do you want to use the team approach in which your team has input in your decisions or a star approach you make all i


Whether you file your taxes yourself or have a preparer file them it is necessary that the proper information be given before e-filing your return. If not it can come with alarming consequences in form of penalties and interest. In order to e-file an accurate tax return, preparers are relying on the client to give them every detail of income, expenses, interest, stocks...etc. Giving the proper information can help you avoid an audit and any other complications with the IRS. This upcoming tax season the IRS will be looking for unclaimed income. IRS is slowly closing in on those who sell and produce income from Ebay, Craigslist, Etsy and other sites that can help an individual generate revenue. It is necessary to keep all receipts for  income or expenses made, it will be to your benefit if there is ever an audit.  Once again, anything that will generate revenue is considered income so keep track of it.


      The IRS has announced many new changes for the upcoming tax season. A lot of changes have been made due to inflation and will have an impact on every taxpayer. Changes Include: 1. Personal and dependent exemptions will increase from $100 to 3,800. 2. Standard deductions have increased in all categories including a $300 increase for married couples filing jointly. 3. There will be an increase in Tax-Bracket thresholds. 4. The maximum earned income tax credit will increase to 5,891 from 5,751. 5. An increase in the income phase out level for married couples that pay student loan interest.     The IRS will also increase the contribution limit for certain retirement accounts. In 2012, the new limit applies to 401(K)s, 403(b)s, the government's Thrift Savings Plan and some 457 plans. There will also be changes to Roth IRAs and pension plans, such as increasing the amount contributed.