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.
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.
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.
Want a better idea of the number and types of taxes you pay? The AICPA created a calculator for that. Visit www.totaltaxinsights.org
Converting a traditional IRA to a Roth IRA creates a taxable event in 2012. All futrue earnings in the account will be tax-free, as long as you wait five years and are age 59 1/2 or older when you take withdrawals. An additional advantage to doing a Roth conversion now is the ability to "undo" the transaction as late as Oct. 15, 2013 should the new Congress pass a reform bill lowering tax rates.
Incomes exceeding [about] $261,650 for married joint and $174,450 for individuals will see a phase-out of their personal exemptions ($3,800 per exemption) in 2013.
There is great concern over the expiration of the “Bush Tax Cuts”. The effect of these cuts expiring is currently being debated economically but the effect on the business owner not knowing is clear. For example it is currently impossible to estimate the true cost of a large fixed asset purchase when the income tax rules are not known.
Here are some of the tax issues coming in 2013:
Scheduled individual income tax rates adjusted for inflation in 2013.
Contributing money and property are ways that you can support a charitable cause, but in order for your donation to be tax-deductible, certain conditions must be met. Read on for six things the IRS wants taxpayers to know about deductibility of donations.
If you make a donation to a charity this year, you may be able to take a deduction for it on your 2011 tax return. Here are the top nine things the IRS wants every taxpayer to know before deducting charitable donations.
1. Make sure the organization qualifies Charitable contributions must be made to qualified organizations to be deductible. You can ask any organization whether it is a qualified organization or check IRS Publication 78, Cumulative List of Organizations. It is available at www.IRS.gov.
What is a reasonable salary?
This question is one that any entity may be faced with, but for S corporations, it is becoming a hot topic. In 2009, a U.S. Government Accountability Office report noted that the combined 2003 and 2004 underreported shareholder compensation was $24.6 billion for corporations with fewer than three shareholders being responsible for nearly all of that. How is that relevant to the IRS?