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Category: Tax Tips

Tax Tips: Tax myths

In an 1939 BBC broadcast, Winston Churchill called Russia “a riddle wrapped in mystery inside an enigma.” This would also be an apt description of our tax code. Our tax laws are written piecemeal year after year by lawmakers unfamiliar with our existing body of tax laws and with little thought toward coherence or consistency. […]

American Tax Relief Act, part 2

After finishing my first article on the American Tax Relief Act of 2012 (see the Jan. 10 issue of the Town Crier) I realized that there were several important provisions that I still needed to discuss. Cancellation of indebtedness income is taxable unless an exclusion applies. The principal residence exclusion for up to $2 million […]

Tax Tips: Countdown to tax time

About this time of year, we begin to collect all the information we will need to properly file our income tax returns. Since it’s been a year, I have listed below some of the items you will want to find. Your employer is required to send you your W2 form by Jan. 31. If it […]

Tax Tips: New American Taxpayer Relief Act

After months of wrangling, Congress passed the American Taxpayer Relief Act of 2012 on Jan. 1, 2013, ending months of “Y2K” style handwringing by the media. The law extends many of the Bush tax cuts for most taxpayers. This article will touch on some of the most important provisions, which apply for tax years 2013 […]

Tax Tips: Tax update

Congress has been gearing up for the 2012 elections so no major tax legislation was passed in 2011. The bill passed in December 2010 extended the Bush tax cuts through 2012. You can expect the battles on how to improve our tax code to resume after the fall elections. But several interesting developments on other […]

Tax Tips: Capital gains and losses

Capital gains are attracting renewed attention from the IRS for tax year 2011. The introduction of Form 8949 is where individual transactions are reported, along with detailed information on how cost basis was determined. Capital gains and losses is an area that offers great tax planning opportunities since in many situations you control when the […]

Tax Tips: Social security benefit taxation

The taxation of Social Security benefits depends on several complex calculations. The first step is to calculate your provisional income, which is your gross income plus tax-exempt interest plus one-half of your social security benefit. You then need to look up your base amount: $25,000 for a single, head-of-household, or married filing separate, (living apart […]

Tax Tips: Audit triggers

The Internal Revenue Service has stepped up its audits over the past few years. In addition to traditional face-to-face audits, it is also conducting an increasing number of correspondence audits where taxpayers are requested to verify various expenses by mail. Increasing scrutiny is being given to tax preparers who prepare fraudulent returns. Once a “bad” […]

Tax Tips: Tax myths

With the tax code approaching the size of the Encyclopedia Britannica, it’s little wonder there are many misconceptions and erroneous beliefs regarding tax regulations. Many people feel that when making charitable deductions, as long as they have their cancelled checks or credit card receipt they’re covered. Nowadays, however, the IRS requires substantiation from the charity […]

Tax Tips: A kinder, friendlier IRS and FTB?

I think it was back when George H.W. Bush was president that there was an effort to create a kinder, friendlier Internal Revenue Service (IRS). With the current budgetary pressures in Washington and the reluctance of Congress to reduce spending or to pass new taxes, there is an effort to make up a part of […]

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