Sandy Soderstedt's blog
The IRS announced that it will provide relief from estimated tax penalty for farmers and fishermen unable to file and pa their 2012 taxes by March 1 due to the delayed start for filing tax returns.
Normally, farmers and fishermen who choose not to make quarterly estimated tax payments are not subject to a penalty if they file their returns and pay the full amount of tax due by March 1. A taxpayer qualifies as a farmer or fishermen for tax-year 2012 if at least two-thirds of the taxpayer's total gross income was from farming or fishing in either 2011 or 2012.
IRA owners who are age 70 1/2 and older have until Jan. 31, 2013 to make tax-free transfers to eligible charities and treat these transfers as if they were made on Dec. 31, 2012. Additionally, eligible IRA owners who received a distribution in December of 2012 can transfer any portion of those distributions to a charitable organization by Jan. 31, 2013, and treat it as made in 2012.
The American Taxpayer Relief Act, H.R. 8 permanently extends provisions of the Economic Growth and Tax Reconciliation Act of 2001 and Jobs and Growth Tax Relief Reconciliation Act of 2003 (with some modifications targeting the wealthiest Americans with higher taxes). It also permanently takes care of Congress's perennial job of patching the AMT and temporarily extends many other tax provisions that had lapsed.
Here is a quick summary of the act's tax features:
Some things to keep in mind while making contributions to charity.
- Clothing and household items donated generally must be in good used condition or better.
- An item claimed with a deduction over $500 should have a qualified appraisal.
- Deductions for a vehicle, boat or airplane is usually limited to the gross proceeds from its sale.
- Money donations must have a bank record or written document from the charity with the date and amount.
The IRS issued proposed regulations concerning the 0.9% Medicare surtax, which takes effect next year (REG-130074-11). The proposed regulations contain guidance for employers and individuals on the implementation of the tax, including the requirement to file a return reporting the tax, the process for employers to make adjustments of underpayments and overpayments of the tax, and the processes for employers and employees to file claims for refund for an overpayment of the tax.
Were you aware that hiring a veteran can have a positive impact on your 2012 tax obligation? If you hire a veteran who begins work before January 1 of next year, you may be eligible for a credit as high as $9,600 if you are a for-profit employer and as high as $6,240 if you are a qualified tax exempt organization. The VOW to Hire Heroes Act of 2011 expanded the categories of veterans who qualify and allowed not-for-profits to use the credit against the employer's share of Social Security tax.
Late on Friday, the IRS announced various tax relief measures for individuals and businesses affected by Hurricane Sandy in named counties located in Connecticut, New Jersey, and New York. Various tax filing and payment deadlines starting due dates in late October are postponed until Feb. 1, 2013. The IRS also announced it is willing to work with any taxpayer who resides outside the disaster area but whose books, records or tax professional are located in affected areas.
May be of minor consequence to those recovering from Sandy but the IRS has eased some tax filings. Workers who receive storm-related compensation from their employers will not face a tax liability. These payments can include a range of expenses, including funeral costs, which are not already covered by insurance. There are no additional IRS forms to fill out for the tax relief. Additionally, taxpayers who need cash quickly for storm repairs can borrow from 401 retirement savings in certain circumstances without the usual penalties.
Protect yourself when using social networks. In other words, don't divulge such information as your full name, age or place of residence. When it comes to sharing images, don't post images that include your car's license plate, your house number or street signs. Similarly, consider not wearing clothes that give away your school or business affiliations.
So, Hurricane Sandy will be coming up the east coast! Overlooking the obvious name connection, I thought I would remind anyone in Sandy's path to safeguard financial records. Good idea to create a backup set of records electronically to an external device such as a CD, DVD, or flash drive. Take some time to document valuables to help prove market value for insurance and casualty loss claims. Verify that emergency plans are updated to meet the current situation. Finally, do all you can to secure a safe location. Might I recommend Hawaii?