All posts in Tax Tips & Alerts

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Feb

Smart Ways to Spend Your Refund

Categories: Individuals, Tax Tips & Alerts

The Internal Revenue Service estimates that about 75% of taxpayers will receive a refund this year. Many of these taxpayers say they are going to be responsible with their refunds by paying down debt or saving it in their emergency fund. Here are a couple more options for spending your tax refund:

Re-balance your portfolio – instead of selling stocks to re-balance, use the extra funds you receive to build up your exposure in the areas that need re-balancing
Prepay your bills – Prepay for your car insurance, car loan payments, phone bills, home insurance, etc. Just be sure to monitor your statements so that you are created for the correct amounts and that you do not end up paying for something that you did not request.
Make home improvements – Don’t forget you may qualify for a residential energy tax credit by making energy-efficient improvements to your home.
Buy a car – Take advantage of the record low car loan rates and use your refund as a downpayment on a new or newer car.

http://finance.yahoo.com/news/smart-ways-spend-tax-refund-191559846.html

Feb

IRS Notification on “Where’s My Refund?” Tool

Categories: Individuals, Tax Tips & Alerts

Tags: refund status, tax refund, where's my refund

Comments: No

On February 14^th, the IRS posted an announcement regarding the disruptive service of the “Where’s My Refund?” tool as well as the refund feature on the IRS2go phone app. Due to the large number of inquiries, they are requesting that tax payers only check on their refunds once a day. The IRS only updates this information once a day, typically overnight, so there is no need to check it over and over again. The IRS also suggests checking your refund status in the evenings or on weekends, when traffic to the tool is lighter.

To read their entire announcement, please click here.

Jan

Start out 2013 Organized!

Categories: Business, Individuals, Tax Tips & Alerts

Tags: tax information, tax organizer, tax planning

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Written by: Annette Clark, CPA

Now that Christmas celebrations are over you should start to keep your eye out for incoming mail related to your taxes. Individual tax organizers have started to go out. You should receive yours shortly if we prepared your 2011 taxes. Use this as a guide as to what you need to collect and provide to your tax professional. It is a whole lot easier to keep all those “tax information enclosed” envelopes than it is to request a second copy. If you are unsure, keep it. If you have a business, complete the tallying of your figures and get 2013 ledgers ready. If you need a 2013 business log/vehicle mileage book stop in or give us a call. Let start 2013 out organized.

Jul

IRS Tax Tips

Categories: Tax Tips & Alerts

Tags: irs tax tips, Tax Tips

Comments: No

Did you know that the IRS has Tax Tips listed on their website? You can subscribe to their Tax Tip page and be notified every time there is a new tip available! Just follow this link to the listing of tax tips for 2012 and this linkto subscribe to the newsletter.

May

Michigan Income Tax Act Amendment

Categories: Individuals, Tax Tips & Alerts

Tags: 2012 Income Tax changes, Michigan Income Tax Act, Michigan Property Tax Changes, Michigan Tax Rate changes, Snyder amends Michigan Income Tax Act

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Written by: Mike Riley, CPA

On May 25, 2011, Governor Rick Snyder signed legislation amending the Michigan Income Tax Act. The new legislation affects 2012 tax returns. Many taxpayers will see an increase in their Michigan income tax – particularly as a result of changes made to the calculation of the Homestead Property Tax Credit. Of course, the staff at Robert F. Murray & Company is available to help answer any questions you may have.

Important changes that you should be aware of are as follows:

Tax Rate:

Rate remains unchanged for 2012 at 4.35%.
For 2013 and each tax year thereafter the rate is 4.25%.

Exemptions:

Personal exemption for 2012 is set at $3,700.
Personal exemptions will be indexed for inflation for 2013 and thereafter.
Repeal of the Special exemption for seniors and for unemployment compensation greater than 50% of AGI.
Special exemption for disabled and exemption for disabled veterans remain unchanged.

Deductions/Subtractions:

Repeal of the $600 deduction for children (age) 18 and under.
Repeal of the Renaissance Zone deduction.
Removes both the gross income and the related expenses from oil and gas production if the gross income was subject to severance tax.

Non-Refundable Credits:

Repeal of the credit for city income taxes.
Repeal of the credit for public contributions.
Repeal of the credit for contributions to homeless shelters, food banks and community foundations.
Repeal of the credit for automobile donations.
Repeal of the credit for college tuition and fees.

Refundable Credits:

Reduces the Earned Income Tax Credit from 20% to 6%.

Property Tax Credit:

Available for homes with taxable values of less than $135,000.
Credit phase out begins at $41,000 of total household resources and is reduced by 10% for each $1,000 increase. Complete phase out at $50,000 of household resources.
For senior claimants: Full Credit of 100% if total household resources are $21,000 or less and reduced by 4% for each additional $1,000 in total Resources until $30,000 is reached. For total household resources of $30,000 to $41,000 senior claimants receive 60% of the credit.
All other claimants are eligible for 60% of the tax credit.
Household income (under the old rules) is now replaced by TOTAL household resources which EXCLUDES losses from business, rentals and royalties and Net Operating losses.

Apr

Time to Write Off the Old GM Stock

Categories: Individuals, Tax Tips & Alerts

Tags: MTLQQ, write off stock loss

Comments: No

The old GM stock (more recently being traded as MTLQQ) stopped trading on the pink sheets in 2011, so now investors are allowed to take the loss on their 2011 tax returns.

If you have already filed your return but have a loss you would like to take, we can certainly help you amend that return.

Call us today!

Mar

When It Sounds Too Good To Be True…

Categories: Individuals, Tax Tips & Alerts

Tags: elderly taxes, income taxes, tax laws, tax scams, taxes

Comments: No

Written by: Paul B. Murray, CPA, ABV, CFF

Unscrupulous tax preparers are luring unsuspecting senior citizens into filing claims for fraudulent tax refunds the IRS announced. The scam involves convincing both tax filers and those with little or no income who are not required to file that they are entitled to federal refunds. Their claims are based on false and misleading information often citing nonexistent rules and regulations or “buzz words” that may sound convincing to someone with limited knowledge of the tax code. It’s understandable with the numerous tax rebates, refundable credits, stimulus programs and the ever changing tax laws that an individual may be confused and susceptible to such scams. The IRS provided a list of situations that should be considered an immediate red flag warning to individuals, including the following:

Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.
Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
Internet solicitations that direct individuals to toll-free numbers and then solicit social security numbers.
Homemade flyers and brochures implying credits or refunds are available without proof of eligibility.
Offers of free money with no documentation required.
Promises of refunds for “Low Income – No Documents Tax Returns.”
Claims for the expired Economic Recovery Credit Program or for economic stimulus payments.
Unsolicited offers to prepare a return and split the refund.
Unfamiliar return preparation firms soliciting business from cities outside of the normal business or commuting area.

The IRS cautions taxpayers to choose wisely when selecting a tax preparer. Ask friends and family for a referral, check web sites, community activity and how long the firm has been in business.

We realize that most of our readers wouldn’t fall prey to such scams but if you have elderly friends, family or neighbors remind them:

When It Sounds Too Good To Be True……………..

Jan

A New Year…New Payroll Tax Changes!

Categories: Individuals, Tax Tips & Alerts

Tags: payroll taxes, tax base change, tax changes, unemployment tax changes

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Written by: Annette Clark, CPA

A new year brings new payroll tax changes that you need to be aware of if you are preparing your own payroll. If you need assistance or have any questions please contact us.

Michigan unemployment wage base has increased from $9,000 per employee to $9,500 for 2012.
The Federal Unemployment tax rate for 2012 will be 1.8% on the first $7,000 earned by each employee. That rate is made up of the base rate of .6% plus 1.2% credit reduction tax. The additional 1.2% is considered a 4^th quarter liability. As long as the State of Michigan fails to repay the federal government for federal unemployment benefits this amount will increase by .3% each year. This will be the 4^th year for Michigan. If your UIA “actual reserve” is positive figure you should complete Form UIA 1110 to receive a credit for a portion of this excess tax on your Michigan unemployment return.
The Social Security wage base has increased from $106,800 in 2011 to $110,100 in 2012.
For wages paid from January 1, 2012 to February 29, 2012 the social security rate used to calculate employee’s withholding is 4.2%. The company match is still at 6.2%. Unless the government extends this tax provision it return to 6.2% for the remained of the year. We will keep you posted.
The elective deferral limit for employees who participate in 401(k), 403(b) and most 457 plans increased from $16,500 to $17,000 for 2012.

Oct

Michigan Income Tax Pension Withholding

Categories: Individuals, Tax Tips & Alerts

Tags: Michigan pension tax payment, required tax withholding

Comments: No

The Michigan Department of Treasury has issued the 2012 pension withholding guide for personal income withholding tax purposes. Effective January 1, 2012, administrators of pension and retirement benefits are required to withhold income tax on taxable payments. Qualified pension and retirement benefits include most payments reported on Form 1099-R for federal tax purposes. For example, defined benefit pensions, IRA distributions, and most payments from defined contribution plans are included. However, on the other hand, payments received before the recipient could retire under plan provisions or benefits from 401(k), 457, or 403(b) plans attributable to employee contributions alone are not considered pension and retirement benefits.
Taxpayers are required to complete Form MI W-4P (Withholding Certificate for Michigan Pension or Annuity Payments) for each pension or annuity.

View complete article: http://www.edkisscorni.com/blog/view/537

Oct

Monitoring Elderly Parents’ Mail

Categories: Individuals, Tax Tips & Alerts

Tags: donations, elderly, mail scams, solicitations

Comments: No

Here is a great KIP TIP from Cameron Huddleston, Contributing Editor, Kiplinger.com, regarding monitoring your elderly parents’ mail.

Financial scams are everywhere we turn. Elderly people are bombarded with donation solicitations in the mail. Now mind you, the majority of these solicitations are legitimate organizations, lobbying groups and political parties, but it can be very overwhelming with the volume that elderly people receive.

To help your parents, start by asking them which organizations matter most to them and try to develop a giving plan for only those groups. The next step is to register your parents with the Direct Marketing Association and removing their names from its national mailing list. This is free if you register on-line. This will not stop all solicitations, but at least slow it down a bit.

http://www.kiplinger.com/columns/kiptips/archives/why-you-should-monitor-your-elderly-parents-mail.html