Would you like personalized accounting, tax, financial and investment advice from an experienced person who cares?

TRUSTED   PERSONABLE   APPROACHABLE

Certified Public Accountant and Registered Investment Advisor

NEWS

End of Year Tax Planning Ideas
-Sell appreciated stocks in conjunction with losing stocks to "harvest" capital gains.
-Donate clothing and household goods. 
-For Arizona residents, consider donations directly to public schools, qualified charities or tuition support organizations to qualify for special Arizona Tax credits (must itemize to take advantage of this),
-Small business owners - purchase equipment or supplies prior to year end to reduce taxable income.
-Self employed business owners - contribute to retirement plan.  If you do not already have a plan in place it is not too late to set up a SEP IRA or solo 401k.

Super Committee and Year End Update
Well the Super Committe proved to be not so super!  In an effort to reduce Federal government spending, many ideas regarding tax rates and tax code changes were talked about.  However, the whispers of taking away the mortgage interest and charitable deductions, increasing tax rates, and simplifying tax code was for naught.  The 11/23/11 deadline passed without any consensus.  The possibility still exists that congress will pass legislation regarding tax code updates/changed prior to year end, but in all likelihood these changes should not be very extensive. 

Tax Relief Act of 2010
In December, the lame duck session of Congress finally provided some clarity for at least the next two years on tax code and rates.  Much of the 2010 tax code and rates remain in place for the next two years.  One
of the more visible items is the payroll tax cut that reduces the contribution rate employees make to Social Security.  It is reduced to 4.2% for 2011 which should translate to slightly larger paychecks.  The Estate Tax rules were set for the next 2 years exempting up to $5 million in estate assets from taxes and setting the tax rate at 35%.  This is a short term "rule set" and leaves estate planning a challenge for some.

Mileage Rates for 2011
Standard mileage rate for business travel is 51 cents/mile.  Medical and moving rates are 19 cents/mile.  Keep those mileage logs up to take advantage of this deduction!

Tax Aspects of the HIRE Act of 2010
There are many changes as a result of the Health Care Act, which take effect in various years.  For 2010 there is a credit for health insurance provided by small employers with less than 25 full time employees and whose average wages are $50,000 or less.  The less pleasing tax items begin to take effect in 2011.  Employers will be required to disclose the value of health care benefits on this year's W2 in preparation for the IRS identifying who does and does not have health insurance.  (upd: 10/12/2010 - IRS has made this requirement optional for 2011 reporting). Excise (penalty) taxes are assessed on those who are not fully covered starting in 2014.  In 2013, medical expenses are not deductible on the Federal return unless they exceed 10% (taxpayers under age 65).  For those over age 65, the threshold for deducting remains at 7.5%.  In 2013, high income taxpayers will get hit with a higher FICA rate for wages exceeding threshold amounts and on investment income.  There are other provisions but time will tell if these stand or possibly get modified by subsequent legislation.