27
Dec

Strategies for Non-Filers to Re-Enter the Tax System

If anyone you know has failed to file tax returns when due, it's important that they be aware of the ways to resolve such a problem. Many nonfilers missed a year for one reason or another, and now are afraid to re-enter the tax system. But in fact, taxpayers who file overdue returns on their own are often treated reasonably well, much better than those who are caught.
24
Dec

Settling Tax Debts

If the IRS is after you to collect a tax liability that's beyond your capacity to pay, you should be aware of a technique that may allow you to settle your tax debt for a fraction of its face value. It's called an offer-in-compromise.
22
Dec

Your Rights Within IRS Disputes or Audits: Vol II

If you are involved in a dispute with IRS or are currently undergoing an audit, you should be aware of your rights to appeal tax determinations within IRS. This approach tends to be less costly and formal than litigating the matter in court, and often results in satisfactory resolution of the issues involved. Our Vol I post covered when you can file an appeal and mediation. In Volume II we address arbitration.
20
Dec

Your Rights Within IRS Disputes or Audits: Vol I

If you are involved in a dispute with IRS or are currently undergoing an audit, you should be aware of your rights to appeal tax determinations within IRS. This approach tends to be less costly and formal than litigating the matter in court, and often results in satisfactory resolution of the issues involved.
17
Dec

Year-End Planning Provides Tax Savings Opportunities: Stock Losses and Investment Preservation

Taking steps today to reduce your tax burden tomorrow is a smart way to manage your tax liability. Review your investment portfolio for opportunities to realize losses on stock while substantially preserving your investment position. There are several ways this can be done. For example, you can sell the original holding, then buy back the same securities at least 31 days later. It may be advisable for us to meet to discuss year-end trades you should consider making.
13
Dec

Year-End Planning Provides Tax Savings Opportunities: Qualified Small Business Stock

Interested in expanding your investment portfolio while limiting your tax burden? Purchase qualified small business stock (QSBS) before the end of this year. There is no tax on gain from the sale of such stock if it is (1) purchased after September 27, 2010 and before January 1, 2011, and (2) held for more than five years. In addition, such sales won't cause AMT preference problems. To qualify for these breaks, the stock must be issued by a regular (C) corporation with total gross assets of $50 million or less, and a number of other technical requirements must be met. Our office can fill you in on the details.
6
Dec

Year-End Planning Provides Tax Savings Opportunities: IRA Conversion

Convert your traditional IRA into a Roth IRA if doing so is expected to produce better long-term tax results for you and your beneficiaries. Distributions from a Roth IRA can be tax-free but the conversion will increase your adjusted gross income for 2010. However, you will have the choice of when to pay the tax on the conversion. You can either (1) pay the tax on the conversion when you file your 2010 return in 2011, or (2) pay half the tax on the conversion when you file your 2011 return in 2012, and the other half when you file your 2012 return in 2013. Your CPA can help you determine which option is right for you.
2
Dec

Year-End Planning Provides Tax Savings Opportunities: Take RMDs from Retirement Accounts

If you have reached age 70 1/2, , another way to reduce your federal tax bill is to take required minimum distributions (RMD) from your IRA or 401(k) plan (or other employer-sponsored retired plan). Failure to take a required withdrawal can result in a penalty of 50% of the amount not withdrawn. A temporary tax law change waived the RMD requirement for 2009 only, but the usual withdrawal rules apply full force for 2010. So individuals age 70 1/2 or older generally must take the required distribution amount out of their retirement account before the end of 2010 to avoid the penalty. If you turned age 70 1/2 in 2010, you can delay the required distribution to 2011, but if you do, you will have to take a double distribution in 2011—the amount required for 2010 plus the amount required for 2011. Think twice before delaying 2010 distributions to 2011—bunching income into 2011 might push you into a higher tax bracket or have a detrimental impact on various income tax deductions that are reduced at higher income levels. Contact our office for more information.