Congress Passes Extender Package

Flag-&-Gavel-ThumbnailCongress has approved the Tax Increase Prevention Act of 2014.  This new law retroactively extends “tax extenders” which had expired at the end of 2013.  This allows taxpayers to claim the popular but temporary incentives on their 2014 returns which will be filed in 2015.  These incentives affect individual and business returns in the following areas: [Read more…]

AMT Changes

What is AMT?

The Alternative Minimum Tax (AMT) is a near flat tax rate imposed on individuals, corporations, estates, and trusts. Getting taxed under AMT usually requires fairly high income levels. The end result ensures that most high income earners have to pay some income tax. Although the AMT exemption amount is not adjusted to inflation, it is usually “patched” by congress at the end of each year with legislation.

Patching

The IRS is currently tentatively waiting for congress to pass the 2013 patch. A patch before year-end could be implemented with minimal delays to most taxpayers. A patch after year-end, according to IRS Commissioner Steven Miller, could have serious repercussions for tax payers. The IRS would have to instruct over 60 million taxpayers that they can’t file or process their tax return until system changes are done.

[Read more…]

What the Affordable Care Act means for your taxes….

Here at Loggins, we know that the Patient Protection and Affordable Care Act (PPACA or ObamaCare) has quite a bit of uncertainty surrounding it.   We are preparing as if the law will go into effect as written.  We’re writing this post because we want to help inform you with some of the basics of the law that we feel will affect the majority of people.  The points below just focus on the taxes in the Act, and even then, we’re only focusing on the taxes that we feel will affect the majority of our clients.  This post doesn’t deal with the health insurance costs or avenues that people can use to find insurance coverage.  For a more complete list of provisions in the act, take a look at this page from the IRS.

 

The Individual Mandate [Read more…]

Recent Developments – That May Affect Your Tax Situation

The following is a summary of the most important tax developments that have occurred in the past three months that may affect you, your family, your investments, and your livelihood. Please call us for more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable. [Read more…]

New Georgia E-verify Requirement Starting Jan. 1

Starting on January 1, 2012, Georgia businesses with 500 or more employees will be required to use E-verify.  This site checks the status of workers to make sure that they are authorized to work in this country.

 

The schedule for the phase-in for using E-verify is: [Read more…]

Collect Form W-9 Now!

It is  extremely important to maintain Form W-9, Request for Taxpayer Identification Number and Certification, on all people you pay to perform services for your business.  This form enables you to correctly file necessary information returns (like 1099s) during the month of January each year.  Since January is right around the corner, [Read more…]

Tax-Saving Ways to Plan for College

Paying for college is one of the greatest financial worries most parents endure.  Aside from your own retirement, college tuition is probably the biggest expenses you will ever face.  It takes planning, research and belt tightening (and maybe some debt) to provide a college education for your children.  Funds will likely come from three sources:  savings, financial aid and tax relief.  Most importantly, you should not save for college at the expense of your retirement savings.  Many organizations, including the federal government, are willing to help your child pay for college.  However, no one is likely to give you a hand-out if your retirement fund comes up short.  Also a qualified retirement fund will not count against you when applying for financial aid.

Investments & Savings – It pays to start early and compound interest.
Allocate your assets based on the age of your children to make sure the money is available when you need it.  If your children are very young (under 11), invest for long-term growth with a large portion in the stock market.  Despite market fluxations, stocks provide the best results over the long-haul if started early enough.  Before your children reach their teens, you may [Read more…]

Six Things to Know About the Expanded Adoption Tax Credit

If you have adopted or plan to adopt in 2011, the IRS would like for you to take advantage of the adoption tax credit expanded by the Affordable Care Act.  This new law increased the amount of the credit and made it refundable, which can increase the amount of your return.  Here are the top six things to know about this tax credit.  Call the Loggins office for more information and assistance in claiming the credit.

 

  • The adoption tax credit, which is as much as $13,170, offsets qualified adoption expenses making adoption possible for some families who could not otherwise afford it.  Taxpayers who adopt a child in 2010 or 2011 may qualify if you adopted or attempted to adopt a child and paid qualified expenses relating to the adoption.
  • Taxpayers with modified adjusted gross income of more than $182,520 in 2010 may not quality for the full amount, and it phases out completely at $222,520.  The IRS may make inflation adjustments for 2011 to this phase-out amount as well as to the maximum credit amount. 
  • You may be able to claim the credit even if the adoption does not become final.  If you adopt a special needs child, you may qualify for the full amount of the adoption credit even if you paid few or no adoption-related expenses.
  • Qualified adoption expenses are reasonable and necessary expenses directly related to the legal adoption of the child who is under 18 years old, or physically or mentally incapable of caring for himself or herself.  These expenses may include adoption fees, court costs, attorney fees and travel expenses.
  • To claim the credit, you must file a paper tax return and Form 8839, Qualified Adoption Expenses, and you must attach documents supporting the adoption.  Documents may include a final adoption decree, placement agreement from an authorized agency, court documents and the state’s determination for special needs children.  Failure to include required documentation will delay your refund.
  • The IRS is committed to processing adoption credit claims quickly, but it also must safeguard against improper claims by ensuring the standards for this important credit are met.  If your return is selected for review, please keep in mind that it is necessary for the IRS to ensure the legal criteria are met before the credit can be paid.  If you are owed a refund beyond the adoption credit, you will still receive that part of your refund while the review is being conducted.

 

 

 

100% Bonus Depreciation Opportunities

Your corporation may be able to significantly benefit from a short-term offer from Uncle Sam. But you need to plan now! This benefit can be used to significantly cut taxes to zero out your 2011 federal tax liability or provide an opportunity to carry back losses to reduce your income in a prior year to receive a refund on tax you already paid.

For a limited time, companies have the opportunity to write off 100 percent of qualifying asset purchases – and achieve major tax savings as a result. Now’s the time to examine the possible tax savings and take your findings to your corporation’s decision makers before the tax break goes away.

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 increased the 50 percent depreciation deduction to 100 percent through 2011. In 2012, bonus depreciation reverts to 50 percent. Make sure those who make purchasing decisions for your company are aware of the tax implications of this bonus depreciation while there is still time to take advantage. Make sure needed equipment is purchased before December 31, 2011.

To be eligible for bonus depreciation, qualified property must meet the following equirements:

  • The asset must be depreciable under Modified Accelerated Cost Recovery System (MACRS) and have a recovery period of 20 years or less.
  • The property must be new and placed in service after September 8, 2010, and up until December 31, 2011.
  • There is a narrow exception to the “new” requirement: Leased equipment under a sale and leaseback that commences within three months of the purchase can qualify as new to the lessee, if the lessee is the first and only user of the equipment.

Innocent Spouse – Elimination of Two-Year Limit

The IRS announced on July 25th that it will extend help to more innocent spouses by eliminating the two-year time limit that applies to certain relief requests. The change is effective immediately.

 “In recent months, it became clear to me that we need to make significant changes involving innocent spouse relief,” said IRS Commissioner Doug Shulman. “This change is a dramatic step to improve our process to make it fairer for an important group of taxpayers. We know these are difficult situations for people to face, and today’s change will help innocent spouses victimized in the past, present and the future.” 

  • The IRS will no longer apply the two-year limit to new equitable relief requests or requests currently being considered by the agency.
  • A taxpayer whose equitable relief request was previously denied solely due to the two-year limit may reapply using IRS Form 8857, Request for Innocent Spouse Relief, if the collection statute of limitations for the tax years involved has not expired. Taxpayers with cases currently in suspense will be automatically afforded the new rule and should not reapply.
  • The IRS will not apply the two-year limit in any pending litigation involving equitable relief, and where litigation is final; the agency will suspend collection action under certain circumstances.