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Archive for the ‘Personal Taxes’ Category

PostHeaderIcon Innocent Spouse Relief Update

The IRS is once again revamping it’s innocent spouse relief rules and they’re looking for some feedback.  Earlier this month, the IRS issued a notice that both revises the threshold requirements for requesting equitable relief and revises the factors used by the IRS in evaluating these requests.  This is a meaty 25 page document that I haven’t absorbed completely but if you have a specific question on the innocent spouse relief rules, I’d love to discuss them with you.

PostHeaderIcon Where Are We With the Payroll Tax Cut?

Here it is, January 15 and we’re about a quarter way through the two month payroll tax cut extension with no word as to whether it’s going to be extended or not.  We have a lot of news on the Republican nominee for president and if you head over to C-Span, I’m not seeing much on the schedule other then….primary stuff.  President Obama is talking about combining agencies in his latest move but I can’t find anything about extending the payroll tax through the end of the year.

When I searched for “payroll tax cut” on Google News, you can see what I get.  There’s a story from Friday where John Boehner talked about circumventing the Tea Party contingent of his party to get the tax cut pushed through and it talks about a new round of talks “in the coming days.”  Not sure what that means.  There are also a few stories about that make it sound like we should be surprised the mortgage fees went up to pay for two month tax cut (this was part of the deal).  Finally, this Washington Times piece talks about how most Congressman won’t even be back from their recess until later in the month and one of the quotes talk about the talks going down to the wire.  The House starts back up with the Thursday and the Senate doesn’t return until January 23.

PostHeaderIcon Reporting Capital Gains (and Losses) in 2012

This is a twist on my New Forms series because while Schedule D (the form where you report capital gains) has changed, they’ve also modified Form 1099-B as well as added a new form.  First off, just by looking at the new Schedule D, you notice the form has changed quite a bit and there’s several references to a Form 8949.  No longer do you report the detail of the your capital gains and losses on Schedule D but you do it on Form 8949 and this information then flows into the more streamlined Schedule D.

And then this all ties into the revised Form 1099-B.  Now brokerage firms are required to report cost basis.  This is just one more way the IRS is cracking down on things.  Before, this information wasn’t reported to the IRS and it was left up to you to compute.  Since the IRS isn’t very trusting these days, cost basis is now being reported to the IRS so they can make sure you’re reporting the full extent of your gain.  On a good note, since everything is right there on the Form 1099-B, it’ll make filling out the form a little easier because you just drop the appropriate numbers into the right boxes.

PostHeaderIcon Gift Tax Primer

It’s the end of the year and you want to move some money to your kids for estate tax planning purposes.  Or they just need a helping hand.  What can you do and what can’t you do and when do you have to file a dreaded gift tax return?  As always, these are general rules so be sure to talk to you adviser to discuss your personal situation.

Since 2009, the annual gift tax exemption has been $13,000.  That means you can give anyone a gift of up to $13,000 in a calendar year without filing a gift tax return.  Pretty straightforward but you can do even more if you’re married.  Since you can technically say that your spouse gave the same amount, if you’re married you can give up to $26,000.

To take this a step further, if you’re married and you’re gifting to your child that’s part of a family of four, you could give $26,000 per person, or $104,000, all without needing to do a gift tax return.

You can give gifts to your spouse without any gift tax implications so that’s one of the exclusions.  Also keep in mind, if you exceed the limit and have to file a return, you probably won’t have to pay tax because of the unified credit but once you start chewing into your unified credit, it could eventually affect how much your estate can shield from taxes.

For more information, be sure to check out Publication 950.

PostHeaderIcon Retirement Home Tax Deduction

Here’s a great story by The Tax Guy about how you can deduct some or even all of the costs incurred in going into some retirement homes. The story talks about the specifics of Continuing Care Retirement Communities and how they qualify for the medical expense deduction.  There’s even a great example in the story.