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Thursday, January 31, 2013

2012 Most Visited Post

The most visited post made during 2012:

ADP Sees 192,000 Private Sector Jobs Added in January

ROSELAND, N.J. (JANUARY 30, 2013) BY MICHAEL COHN Employers added 192,000 jobs in the private sector this month, according to payroll giant ADP, with small businesses showing the largest job gains.

Wednesday, January 30, 2013

What 'Permanent' Means When Talking Tax

One aspect of The American Taxpayer Relief Act of 2012, signed by President Obama on October 3, 2013, is the frequency that specific items were made 'permanent.' While being 'permanent' is better than 'temporary' or 'sunsetting' as it relates to tax planning, what 'permanent' means is .... this is the rule until Congress changes it. Congress can, and often does, change any tax rule anytime it can agree. Also, the IRS itself can change how a rule is interpreted by the issuance of Publications and Rulings. Consequently 'permanent' changes frequently.

Tuesday, January 29, 2013

IRS further delays acceptance of returns claiming Form 8863 education credits

BY SALLY P. SCHREIBER, J.D. JANUARY 28, 2013 On Monday, two days before the delayed Jan. 30 start of the 2013 filing season, the IRS announced a further delay in processing returns that contain Form 8863, Education Credits, which must be filed by people claiming the American opportunity and the lifetime learning tax credits (IR-2013-10). During testing, the IRS discovered that programming modifications must be made before the form can be processed correctly so returns that include the form cannot be filed until mid-February. The IRS emphasized that returns claiming other education-related items, such as the student loan interest deduction and the deduction for higher education tuition or fees, can be filed beginning Wednesday, Jan. 30. The IRS also noted that its website contains a list of 30 other forms that cannot be filed yet because the forms must be updated and systems for processing them tested. A date will be announced when returns containing these forms will be accepted, but that date will probably be late February or sometime in March. —Sally P. Schreiber ( is a JofA senior editor.

Monday, January 28, 2013

Android is 3 to 1 vs Iphone

Together, the two shipped just under 200 million smartphones around the world last quarter to grab a record market share, says Strategy Analytics. href=""

Alternative Minimum Tax (AMT) under Relief Act of 2012

One aspect of the complexity of the tax law has been how the AMT, which was originally enacted to 'alternatively tax high income taxpayers' was potentially and unintentionally applicable to middle income taxpayers. It was estimated that before the act and additional 28 million taxpayers would be subject to the AMT. For tax years beginning after 2011, personal credits that had been excluded for offset, are now usable for 2012 and future years. Capital Gain and Dividend rates for regular tax continue applying for AMT for 2012 and future years. 'Future years' merely means there is no built-in sunset date. Congress still has discretion to change tax law any time they can agree. Additionally, for upper income taxpayers, the title 'Tax Relief Act of 2012' is an illusion.

Thursday, January 24, 2013

IRS Offers Advice for Coping with Delayed Return Filing

WASHINGTON, D.C. (JANUARY 23, 2013) BY MICHAEL COHN The Internal Revenue Service provided advice to taxpayers Wednesday on dealing with the late opening of tax season on January 30 that could also prove helpful to tax preparers.

Wednesday, January 23, 2013

Child and Dependent Care Credit

The child and dependent care tax credit were permanently extended for taxable years beginning in 2013. A dependent (defined as being under age 13 at the end of the tax year OR incapable of self-care) that requires paid care in order for you to work (or look for work), may qualify for a credit up to $1,050 or 35% of $3,000 of eligible expenses. For two, or more, qualifying dependents, you can claim up to 35% of $6,000 (or $2,100) of eligible expenses. With higher income earners the credit % is reduced, but not below 20%, regardless of amount of adjusted gross income.

Tuesday, January 22, 2013

IRS Offers Guidance on Reporting Mortgage Interest Premiums after Fiscal Cliff Deal

WASHINGTON, D.C. (JANUARY 18, 2013) BY MICHAEL COHN The recent fiscal cliff tax deal extends the ability to treat mortgage insurance premiums as qualified residential interest, and the Internal Revenue Service is providing guidance on how to report the premiums on Form 1098, both electronically and on paper.

Monday, January 21, 2013

Mathematicians Hope To Take Publishers Out of Publishing

Episciences Project to launch series of community-run, open-access journals January 18, 2013 Mathematicians plan to launch a series of free open-access journals that will host their peer-reviewed articles on the preprint server arXiv, Nature News reports. The project was publicly revealed yesterday in a blog post by Tim Gowers, a Fields Medal winner and mathematician at the University of Cambridge, UK.

2013 Long Term Capital Gains and Dividends

In 2013 tax rates on cpaital gains and dividends for taxpayers whose income is at or below $400,000 ($450,000 for married, filing jointly) remain the same as 2012. Therefore, for taxpayers in the 10% and 15% brackets, the rate remains 0%. For taxpayers in the mid-range brackets, the rate is 15%. For those above the above thresh-hold, the rate of both capital gains and dividends is increased from 15% in 2012 to 20% in 2013.

Wednesday, January 16, 2013

Simplified home-office deduction safe harbor announced

While the computation of amount is greatly simplified, the provision still includes the reference that the office space in home is used 'exclusively' for the related business. Taken literally, that is a high hurdle. For instance, my only office space is in my home, but it is clear that I use it for a variety of activities (personal, church, and professional work), so I fail the 'exclusive' test.

Saturday, January 12, 2013

Federal Revenues Continue to Improve

Federal revenues have increased by a total of 22.7%, despite a 2-year payroll tax holiday and no increase in tax rates!

Thursday, January 10, 2013

2013 Tax Rates Individuals; Trusts; Estates

One aspect of the "American Tax Relief Act of 2012" is that it reduced the propensity for annual, year-end, congress critter, stand-offs by making tax rates 'permanent' rather than 'temporary.' The link is to a one-page, PDF, of new rates effective January 1, 2013:

Wednesday, January 09, 2013

IRS Delays Tax Season until End of January

WASHINGTON, D.C. (JANUARY 8, 2013) BY MICHAEL COHN The Internal Revenue Service said Tuesday that it plans to open the 2013 tax filing season and begin processing individual income tax returns on Jan. 30, more than a week after the initially planned start date of Jan. 22, but some returns cannot be processed until late February or March.

Tuesday, January 08, 2013

Thursday, January 03, 2013

ADP 215K Jobs in Dec

December 2012 ADP National Employment Report® U.S. Economy Added 215,000 Private-Sector Jobs in December, According to ADP National Employment Report.

Wednesday, January 02, 2013

Tax Deal Compared To Going Over Cliff

JAN 2 2013, 1:47 PM ET 13 Households making between $200,000 and $500,000 saved the most compared to a world where we went off the cliff forever. Congratulations, if you're reading this, you survived the fiscal cliff. To celebrate the occasion, Congress is giving all of us a tax hike -- though not as big a tax hike as we would have otherwise gotten. Happy New Year? There's a lot not to like about the fiscal cliff deal, but the biggest thing not to like is the expiring payroll tax cut. As you can see in the chart below, from the Tax Policy Center, it lowers everybody's after-tax income by at least 1 percent, despite the bottom 99 percent of the Bush tax cuts getting renewed and rebranded as the Obama tax cuts.

Congress passes fiscal cliff act

BY PAUL BONNER AND ALISTAIR M. NEVIUS JANUARY 1, 2013 Pulling back from the “fiscal cliff” at the 13th hour, Congress on Tuesday preserved most of the George W. Bush-era tax cuts and extended many other lapsed tax provisions. Shortly before 2 a.m. Tuesday, the Senate passed a bill that had been heralded and, in some quarters, groused about throughout the preceding day. By a vote of 89 to 8, the chamber approved the American Taxpayer Relief Act, H.R. 8, which embodied an agreement that had been hammered out on Sunday and Monday between Vice President Joe Biden and Senate Minority Leader Sen. Mitch McConnell, R-Ky. The House of Representatives approved the bill by a vote of 257–167 late on Tuesday evening, after plans to amend the bill to include spending cuts were abandoned. The bill now goes to President Barack Obama for his signature.

Google Glass update

January 2, 2013 Google Glass will let you access information “so fast that you feel you know it,” says Project Glass leader Babak Parviz Summary of an IEEE Spectrum report In the next few weeks, Google will start shipping its Google Glass to developers. More-polished consumer models are expected in 2014.

IRS e-Services Systems Down Until Jan. 6

WASHINGTON, D.C. (DECEMBER 31, 2012) BY JEFF STIMPSON In addition to the previously announced Centralized Authorization File outage from December 26 to January 2 at 6 a.m. ET (see "IRS Warns of Service Disruption Christmas Week"), the IRS e-Services' Transcript Delivery System, Disclosure Authorization and Electronic Account Resolution systems will be unavailable for three additional business days. They should return to operation January 6.