With the looming expiration of the $5 million estate and gift tax exemptions and the current favorable top tax rate of 35 percent, estate tax planning has become a significant area of focus among many tax advisers. Possible expiration of these provisions has fueled the emphasis on the importance of addressing the impact on individuals […]
The IRS recently issued guidance on the difference between a tip and a service charge. The distinction is important because service charges are considered revenue of the establishment. To the extent that the service charges are, in turn, paid to the employees, that amount is compensation, subject to all payroll taxes and withholdings. The employer’s […]
With the Supreme Court’s finding that the 2010 federal healthcare act is constitutional, it’s time to consider one of the revenue-raising provisions of the act and the ways it may affect next year’s tax situation. As a generalization, the net investment income of taxpayers with total income over a certain threshold is subject to a […]
The volume of claims for the Small Business Health Care Tax Credit has been lower than expected, according to a Treasury Inspector General for Tax Administration audit released Nov. 7, 2011. As of mid-May 2011, only 228,000 taxpayers out of an estimated potential pool of 4.4 million taxpayers have made claims for the credit. Less […]
A new act extends the work opportunity tax credit for one year but only for qualified veterans who begin work before Jan. 1, 2013. The act also makes a number of changes for hiring qualified veterans. The Three Percent Withholding Repeal and Job Creation Act was signed by President Obama on Nov. 21, 2011. Effective […]
An employer using an accrual method of accounting may take a deduction in the current year for a fixed amount of bonuses, according to a new IRS ruling. The deadline covers bonuses payable to a group of employees even though the employer does not know which of the employees will receive a bonus or the […]
The IRS Large Business and International Division has issued guidance to examination teams on the procedures and requirements they are to follow when reviewing and using Schedule UTP, Uncertain Tax Position Statement, in conjunction with their examinations. Schedule UTP requires certain corporations to report each federal income tax position taken on their returns for which two […]
To help a struggling economy, Congress has encouraged business investment in capital equipment using two incentives. Through 2011, new equipment – not used equipment recently purchased – qualified for a 100 percent bonus depreciation deduction. But for calendar year 2012, the first-year bonus percentage drops to 50 percent, and for 2013 there is no bonus […]
In the closing days of 2011, Congress passed tax legislation that temporarily extended a payroll tax cut, but did not extend two important depreciation incentives – a lack of action that will be important as taxpayers plan their income and deductions for 2012. For 2011, Congress reduced by 2 percent the employee share of the […]
Taxpayers involved with passive activities should make sure they understand the ins and outs of the rules – especially in view of recent developments. Medicare surtax in 2013. Under the 2010 healthcare act, a surtax on higher-income individuals’ net investment income becomes effective in 2013. The surtax is 3.8 percent of the lesser of net investment […]