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…
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…
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…
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”…
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…
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…
Editor’s note: “Tax tips” returns and will appear bi-weekly throughout tax season. Stephen T. Peppler, E.A., C.F.P., has graciously agreed to provide the tax information to our readers. This time of year we begin to get our records together and make plans for filing our taxes. Whether to complete them on your own or seek…
