SKR+Co Alert: Medicare tax increases, incorrect tax notices, & more!
December 13, 2012
The IRS provides guidance on additional 0.9% Medicare tax
On Nov. 30, the IRS issued proposed regulations regarding the 0.9% Additional Hospital Insurance Tax on High-Income Taxpayers (commonly referred to as the additional Medicare tax), which takes effect Jan. 1, 2013. This article details how the tax may affect individuals, employers and payroll service providers.
Read the Full Article Here.
The IRS provides guidance for new 3.8% tax on investment income
Recently, the IRS issued proposed regulations regarding the new 3.8% net investment income tax (NIIT, also known as the Medicare contribution tax) that was created by the Health Care and Education Reconciliation Act of 2010 and takes effect Jan. 1, 2013. This article details what investment income is subject to the tax and how to calculate it.
Read the Full Article Here
Incorrect notices sent by the Colorado Department of Revenue
When the Colorado Department of Revenue (CDOR) implemented a new computer system recently, it created mismatches in information. As a result, numerous notices have been generated, many of which are incorrect.
Many of you have called and are concerned because you received a tax notice from CDOR. We're seeing notices disallowing Enterprise Zone credits, credit for taxes paid to another state, Colorado Source capital gains, some issues related to withholding from your W-2, as well as other situations.
Be careful not to jump to conclusions because in most cases, the information filed with CDOR was correct. However, it sometimes costs more to contest the notice than to simply let the credit be disallowed, for example.
If you receive such a notice, call your tax accountant and let us help you determine the facts and what action, if any, should be taken in your specific situation.
2012 Gift tax annual exclusion: Use it or lose it
The 2012 gift tax annual exclusion allows you to give up to $13,000 per recipient tax-free without using up any of your lifetime gift tax exemption. If you and your spouse “split” the gift, you can give $26,000 per recipient. The exclusion is scheduled to increase to $14,000 ($28,000 for split gifts) in 2013.
The gifted assets are removed from your taxable estate, which can be especially advantageous if you expect them to appreciate. That’s because the future appreciation can avoid gift and estate taxes.
But you need to use your 2012 exclusion by Dec. 31 or you’ll lose it. The exclusion doesn’t carry from one year to the next. For example, if you don’t make an annual exclusion gift to your grandson this year, you can’t add $13,000 to your 2013 exclusion to make a $27,000 tax-free gift to him next year.
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Year-End Tax Planning
With so much uncertainty regarding taxes and the fiscal cliff, now is a great time to come in and talk through the issues that affect your situation.
Donating Appreciated Property to Charity
The tax law imposes stringent requirements for deducting charitable gifts of property. The rules are especially tough when donating appreciated property. If taxpayers don’t observe all of them, the tax deduction may be reduced or even eliminated.A recent U.S. Tax Court case dramatically illustrates this point. This article discusses the tax benefits of donating appreciated property to charity and details the case of Mohamed v. Commissioner.
Read the Full Article Here
Standard mileage rates go up a penny in 2013
Beginning on Jan. 1, 2013, the standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes will be:
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56.5 cents per mile for business miles driven.
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24 cents per mile driven for medical or moving purposes.
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14 cents per mile driven in service of charitable organizations.
For more information, click here.
We welcome the opportunity to talk with you about your specific needs or to answer your questions, You can contact us at (719) 630-1186 or through our Secure Email.
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Many taxpayers have to file extensions this year because the IRS was not ready to accept certain forms at the beginning of tax season. Therefore, the IRS announced yesterday that it is waiving the late-payment penalty for taxpayers filing one of the
