Tax Tips

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…