Category Archives: 2013 Tax Changes

APRIL 1 DEADLINE : IRA Plan Distributions

Many Retirees Face April 1 Deadline To Take Required Retirement Plan Distributions
IR-2014-38, March 27, 2014 — The IRS reminds taxpayers who turned 70½ during 2013 that in most cases they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Tuesday, April 1, 2014.

Source: IRS.gov

Charitable Contributions Under the Magnifying Glass

Uncle Sam Arm holding Magnifying GlassOrganizations That Qualify To Receive Deductible Contributions

Many of us have our favorite charities that we know and have contributed to in the past.  However, not every charitable contribution is deductible – specifically – those contributions made to individuals.

Please refer to the IRS Publication 526 to get filing guidelines for tax year 2013.  They cover just about everything and include: Organizations That Qualify To Receive Deductible Contributions, Contributions You Can Deduct, Contributions You Cannot Deduct, Contributions of Property, When To Deduct, Limits on Deductions, Records To Keep, and How To Report.

A few posts back we discussed charitable contributions in Part I and Part II on Substantiating Tax Deductions for Charitable Contributions.  According to the IRS, for 2013, you may have to reduce the total amount of certain itemized deductions, including charitable contributions, if your adjusted gross income is more than:

  • $150,000 if married filing separately,
  • $250,000 if single,
  • $275,000 if head of household, or
  • $300,000 if married filing jointly or qualifying widow(er).

They also discuss Disaster relief.

“You can deduct contributions for flood relief, hurricane relief, or other disaster relief to a qualified organization (defined under Contributions) Organizations That Qualify To Receive Deductible . However, you cannot deduct contributions earmarked for relief of a particular individual or family.”

How to check whether an organization can receive deductible charitable contributions. You can ask any organization whether it is a qualified organization, and most will be able to tell you. Or go to IRS.gov. Click on “Tools” and then on “Exempt Organizations Select Check”  (www.irs.gov/Charities&NonProfits/ExemptOrganizationsSelectCheck).

This online tool will enable you to search for qualified organizations. You can also call the IRS to find out if an organization is qualified. Call 1-877-829-5500. People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www.gsa.gov/fedrelay.

The IRS has a tool that you can use to check charitable organizations.  http://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check

 

Pat Michael and his team at US-TaxLaws is your best source for professional tax preparation services with more than 30 years experience and thousands of satisfied clients.

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & Trusts Estate Planning   Bookkeeping   Payroll

 

 

 

 

 

 

 

 

http://us-taxlaws.com/wp-content/uploads/2014/03/IRS-Publicatim-526-Charitable-Contributions.pdf

MarketWatch Highlights Tax Law Changes

Have you planned for these 7 tax law changes?

CALL US - 619-589-8680Seven significant new income tax law changes went into effect at the beginning of the year as a result of two pieces of legislation:

The 2010 Health Care Reform Act
The American Taxpayer Relief Act of 2012

Although the new laws are primarily designed to increase taxes for those with higher levels of income, everyone with earned income is affected. With the first seven months of 2013 behind us, have you begun planning for these changes? Continue reading

Medical and Dental Expense Deduction – FTB CA

 

FTB CAFederal changed the allowable medical and dental expense deduction amount for federal purposes. A deduction is allowed for unreimbursed allowable medical and dental expenses that exceed 10 percent of federal adjusted gross income (AGI) California allows a deduction for medical and dental expenses that exceed 7.5 percent of federal AGI. For more information, go to ftb.ca.gov and search for Schedule CA 540.

TRANSLATION:  If you have medical and dental expenses that exceed the 7.5% threshold in California, you will be able to claim these expenses under California Tax Law even if you don’t have enough  to meet the 10% federal threshold.

Tax information is not tax advice.  If you need your questions answered, call 619-589-8680 for an appointment.  Pat Michael and his team at US-TaxLaws.com  is your best source for professional tax preparation services with more than 30 years experience and thousands of satisfied clients.

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation  Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services  Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & Trusts   Estate Planning   Bookkeeping   Payroll

Flash – 2013 Short Sellers Get State Tax Relief

 

Franchise Tax Board, State of CAFranchise Tax Board of California 

We updated our website to include information about mortgage debt relief for taxpayers who sold their principal residences through a short sale in 2013.

According to an Internal Revenue Service (IRS) Information Letter dated September 19, 2013, the IRS determined that California taxpayers who sell their principal residences for less than what is owed on the home as part of a short sale, in which the lender agreed to the short sale, do not incur cancellation of indebtedness income. Instead, the amount of forgiven debt is included in the amount realized in determining gain on the sale of that residence.

The IRS guidance is limited to California short sales only. The IRS guidance did not specifically address other types of real estate transactions such as non-judicial foreclosures and mortgage loan modifications.

We will update information and FAQs on our website soon. For more details and updates, please go to ftb.ca.gov and search for mortgage forgiveness debt relief.

 

Pat Michael and his team at US-TaxLaws is your best source for professional tax preparation services with more than 30 years experience and thousands of satisfied clients.
Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation
Corporate Tax Preparation   Incorporation-Choice of Entity    Business Support Services    Corporate Compliance    Audit Representation   Retirement Tax Planning   Wills & Trusts   Estate Planning   Bookkeeping   Payroll 

3 Tax Tips You Need to Know Heading Into 2014

Countdown to the New Year.

FoxNews irs-logo-tax-1040-formThe budget deal that Congress and President Obama struck at the beginning of the year to avoid the fiscal cliff resulted in seven tax increases. If you throw in the six tax hikes that are part of Obamacare,  that means there are 13 new taxes that may have hit you in 2013.

1.) The biggest potential taxes for wage earners include: Continue reading

Safe Harbor Rule Does Not Favor Child Care Providers

January 29 Header for ChildCare Site

Recently, the IRS updated this ruling, and we feel even stronger now that for the vast majority of our child care provider clients this rule is not in their favor and we will not be using it.   To read more, see original post  Safe Harbor Rule Does Not Favor Child Care Providers.

 

Troubled or Modified Loans?

If you had a loan modified, or lost a property in foreclosure or short sale in 2013, I will need to have all the details.  You can’t put behind you until we deal with the tax issues.

For instance, you might have income from cancellation of part of the mortgage.  Look for Forms 1099-A and/or 1099-C in the mail.  I must see these.

What I also need from you are all the details surrounding what happened.  I need the history of all the loans associated with the property.  It will help to see mortgage statements.  Many times these cases involve more than simply tax law, so please be as thorough as possible.

If you have any questions – don’t hesitate to call.  The number is 619-589-8680.

Dec 2013 – April 2014 Tax Dates to Keep In Mind

YOUR TAX CALENDAR

December 31

  • A check mailed on December 31 counts for 2013.  Last chance for deductions!
  • State estimated tax paid December 31 is deductible on 2013 Federal Return

January 15

  • 4th quarter estimated tax payments due.

February 1

  • Employers – Quarterly payroll & FUTA due (Federal Unemployment Tax).
  • W-2s and 1099s due to recipients.

March 3

  • W-2s and most 1099s due to IRS.

April 15

  • 2103 Tax Returns due.
  • Last day for 2013 IRA contributions.

Pay-It-Forward Tax-Saving Moves for 2013!

What Tax Moves Can You Make In December?

Identify and pre-pay deductible expenditures

In our last “tax move” post, we suggested taxpayers look at all the options they have for lowering their tax bill due in 2014.  Here are some more possibilities:

January house payment – Prepaying your mortgage will give you 12 months of deductible interest.  The same for a vacation home. Continue reading

10 Things The IRS Needs To Know About Your Child or Dependent Care.

Small CCP teaching childrenIF YOU WANT TO GET CREDIT FOR CHILD and DEPENDENT CARE, THE IRS NEEDS TO KNOW…  

If you paid someone to care for your child, spouse, or dependent last year, you may be able to claim the Child and Dependent Care Credit on your federal income tax return.

Below are 10 things the IRS wants you to know about claiming a credit for child and dependent care expenses. Continue reading

Moves To Lower Your 2013 Tax Bill

1040 Sm Photo IstockTAX MOVES TO MAKE BEFORE CHRISTMAS.
Ways to reduce your 2013 tax bill. 

December 31 is approaching quickly – and there are some things you can do to lower your tax bill.  We encourage our clients to come in for a review, especially if there are life-situation changes. Did they marry or divorce? Is there are new child? Is there unscheduled income, or benefits. We want to look at that before the close of the year.   

As part of our updates on the laws that are changing, we are sharing valuable articles for your convenience.

This article is the first of two we will bring you from one of MarketWatch of the Wall Street Journal.

 

Continue reading

IRS Provides Answers to FAQ on Itemized Deductions for Medical Expenses

Larger IRSQuestions and Answers: 2013 Changes to the Itemized Deduction for Medical Expenses

1. When do changes to the itemized deduction for medical expenses take effect?

The rules are changing if you plan to itemize medical deductions on your 2013 federal tax return that you will file in 2014. The change will not affect income tax returns for the 2012 taxable year that will be filed in 2013. Continue reading

2013 changes to itemized deduction for medical expenses

Larger IRSNow is the time to talk with your tax preparer to understand the other 2013 changes to your itemized deductions

The rules are changing if you plan to itemize medical deductions on your 2013 federal tax return that you will file in 2014. It does not affect income tax returns for the 2012 taxable year filed in 2013.

Beginning Jan. 1, 2013, you can claim deductions for medical expenses not covered by your health insurance that exceed 10 percent of your adjusted gross income. This change affects your 2013 tax return that you will file in 2014.

There is a temporary exemption from Jan. 1, 2013 to Dec. 31, 2016 for individuals age 65 and older and their spouses. If you or your spouses are 65 years or older or turned 65 during the tax year you are allowed to deduct unreimbursed medical care expenses that exceed 7.5% of your adjusted gross income. The threshold remains at 7.5% of AGI for those taxpayers until Dec. 31, 2016.

Beginning Jan. 1, 2017, all taxpayers may deduct only the amount of the total un reimbursed allowable medical care expenses for the year that exceeds 10% of your adjusted gross income.

Page Last Reviewed or Updated: 06-Aug-2013

Reduce Your Taxes with Miscellaneous Deductions

IRS Summertime Tax Tip 2013-15, August 5, 2013

small IRS logo for bloggingIf you itemize deductions on your tax return, you may be able to deduct certain miscellaneous expenses. You may benefit from this because a tax deduction normally reduces your federal income tax.  Here are some things you should know about miscellaneous deductions:

Deductions Subject to the Two Percent Limit.  You can deduct most miscellaneous expenses only if they exceed two percent of your adjusted gross income. These include expenses such as: Continue reading

What Information Will The IRS Disclose to HHS On Your Healthcare?

The IRS will disclose taxpayer information to assist the HHS in determining healthcare eligibility.  How will this affect you? 

On Aug. 13, 2013, the Department of the Treasury and the IRS issued final regulations with rules for disclosure of return information to the Department of Health and Human Services that will be used to carry out eligibility determinations for advance payments of the premium tax credit, Medicaid and other health insurance affordability programs. For additional information on the final regulations, see our questions and answers.

Continue reading

Latest News on Same-Sex Marriage & Income Tax

Treasury and IRS Announce That All Legal Same-Sex Marriages Will Be Recognized For Federal Tax Purposes; Ruling Provides Certainty, Benefits and Protections Under Federal Tax Law for Same-Sex Married Couples Continue reading

Deadline for some same-sex marrieds is September 15, 2013

The IRS has released FAQs clarifying the Revenue Ruling 2013-17 .

Here is a link to the complete IRS FAQ. that make it clear that same-sex married couples must file extended 2012 returns by September 15, 2013, to file as single.

For tax year 2013 and going forward, same-sex spouses generally must file using a married filing separately or jointly filing status.

For tax year 2012 and all prior years, same-sex spouses who file an original tax return on or after Sept. 16, 2013 (the effective date of Rev. Rul. 2013-17), generally must file using a married filing separately or jointly filing status.

For tax year 2012, same-sex spouses who filed their tax return before Sept. 16, 2013, may choose (but are not required) to amend their federal tax returns to file using married filing separately or jointly filing status.

For tax years 2011 and earlier, same-sex spouses who filed their tax returns timely may choose (but are not required) to amend their federal tax returns to file using married filing separately or jointly filing status provided the period of limitations for amending the return has not expired.

A taxpayer generally may file a claim for refund for three years from the date the return was filed or two years from the date date the tax was paid, whichever is later.

For information on filing an amended return, go to Tax Topic 308, Amended Returns, at http://www.irs.gov/taxtopics/tc308.html.the tax was paid, whichever is later.
For information on filing an amended return, go to Tax Topic 308, Amended Returns, at http://www.irs.gov/taxtopics/tc308.html.