2011 Retirement Plan IRS Limitations

The Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2011. In general, these limits will either remain unchanged, or the inflation adjustments for 2011 will be small. Highlights include: The elective deferral (contribution) limit for employees who participate in section 401(k), 403(b),…

Details

IRS now accepting taxpayer records in electronic format from Intuit and Peachtree

The Internal Revenue Service has started accepting taxpayer records in electronic format from small businesses using Intuit’s QuickBooks and Sage’s Peachtree accounting software for audits and examinations. Electronic files should be provided on a CD, DVD, or flash/jump drive to ensure security of the files. E-mail should not be used to transmit the electronic records.…

Details

The Patient Protection and Affordable Care Act created a new 3.8% Medicare tax

The Patient Protection and Affordable Care Act created a new §1411, which is effective for tax years beginning after December 31, 2012. This section will impose on high-income households a 3.8% Medicare tax on the lesser of “net investment income” or the excess of modified adjusted gross income over a “threshold amount” (generally $250,000 for taxpayers…

Details

Limitations on tax credit or refund claim

TITLE 26 > Subtitle F > CHAPTER 66 > Subchapter B > § 6511 – Feb 01, 2010 (a) Period of limitation on filing claim Claim for credit or refund of an overpayment of any tax imposed by this title in respect of which tax the taxpayer is required to file a return shall be filed…

Details

Number of Decedents Subject to Estate Tax Continues to Drop

Citizens for Tax Justice has released State-by-State Estate Tax Figures: Number of Deaths Resulting in Estate Tax Liability Continues to Drop: New data from the IRS show that only 0.6 percent of deaths in the U.S. in 2008 resulted in estate tax liability in 2009. (Estate taxes are usually filed during the year after the…

Details

Specific lines provided on Colorado income tax forms for subtractions from income

Taxpayers and tax professionals should note that the Colorado individual income tax form (104) and the Colorado corporation income tax form (112) have specific lines on them for Subtractions from Federal Taxable Income, such as United States government interest and pension-annuity subtractions for individuals; exempt federal interest, excludable foreign source income subtractions for corporations, and…

Details

Homeowners Can Deduct Interest on Mortgage Loans Up To $1.1m

The IRS today ruled that indebtedness in excess of $1 million incurred to acquire, construct, or substantially improve a qualified residence may constitute home equity indebtedness within the meaning of § 163(h)(3)(C). Rev. Rul. 2010-25, 2010-44 I.R.B. ___ (Nov. 1, 2010). In the ruling, a taxpayer who purchased a $1.5 million home with $300,000 cash and a $1.2 million…

Details

1031 Like Kind Exchange Example

Bill and Geri completed a like-kind exchange a little over a year ago when one rental property was exchanged for another rental property in Florida.  Bill and Geri intend to retire to Florida as soon as possible and would like to convert the acquired rental to their principal residence. They are concerned about the sizable…

Details

Tax Implication of a ‘Short Sale’

A new term that has entered the mortgage loan industry in recent years is a short sale. Simply put, a short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. This answer to homeowners underwater occurs when a borrower cannot pay his…

Details

Self Employed Health Insurance Deduction

For tax year 2010, a self-employed taxpayer will be eligible to claim a self-employed health insurance deduction on Line 29 of Form 1040. Additionally taxpayers also receive a corresponding deduction when calculating self-employment taxes. When calculating self-employment tax, taxpayers can claim a self-employed health insurance deduction, but only for tax years beginning in 2010 [§162(l)(4)].…

Details