July Tidbits
Tax Planning
With less than 6 months remaining in 2012 and unknown tax rates for 2013, you may want to consider making some tax planning decisions. In 2013 the standard deduction increases, does it make financial sense to prepay property taxes in 2012? Is now the time to sell some investment stocks and claim those losses in 2012? For businesses, in 2012 the maximum Section 179 deduction is $139,000 but it is currently scheduled to reduce to $25,000 in 2013. Please do not hesitate to call our office with questions or, if you would like, to make an appointment.
Expired Tax Provisions
Some tax provisions which expired at the end of 2011 that may be extended by Congress in 2012 are: the so-called “Alternative minimum tax patch”, the deduction for state and sales tax, the deduction for mortgage insurance premiums, and provision for people over 70.5 years to make tax-free withdrawals from their IRAs for charitable contributions. An even larger number of provisions are set to expire at the end of 2012, these include the Bush-era; reduced tax rates on dividends and long-term capital gains, various marriage penalty relief provisions, certain components of the child tax credit, the earned income tax credit, and the delay on the phase-outs of itemized deductions and personal exemptions.
Prepare for Disasters by Safeguarding Tax Records
Taxpayers should store backups of records in a separate safe place. Scan copies of records to a portable drive and store off-sight. Another step taxpayers can take is to photograph or videotape the contents of their home, especially the items of higher value. The IRS has a disaster loss workbook, Publication 584, which taxpayers can refer to. With a photographic record, an individual can help prove the market value of items for insurance and casualty loss claims. Also, for employers who use a payroll service, employers should ask if they have a fiduciary bond in place. The bond could shield the employer in the event of default by the payroll service provider.
