Mileage rate for 2012 updated!

This article is from the Journal of Accountancy:

The IRS on Friday released standard mileage rates for use in 2012 (Notice 2012-1). Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile.

For business use of an automobile remains at 55½ cents per mile. For medical or moving expenses, it is 23 cents per mile (a half-cent decrease from the second half of 2011). For services to charitable organizations, the rate (which is set by statute) is 14 cents per mile.
Rather than using the standard mileage rates, taxpayers may instead use their actual costs if they maintain adequate records and can substantiate their expenses. The rules for substantiating these amounts appear in Rev. Proc. 2010-51.
For automobiles a taxpayer uses for business purposes, the portion of the business standard mileage rate treated as depreciation is 23 cents per mile for 2012 (it was 22 cents per mile for 2011).

10/19 WEBINAR: WHAT'S IN YOUR ESTATE PLAN? (AND IS IT STILL WORKING FOR YOU?)

For most Americans, estate planning is something that they'd rather put off for another day. After all, deciding how they want their assets distributed is a stark reminder of their mortality.

However, there are numerous reasons why each of us should tackle this task with at least some eagerness. This includes naming the people to whom we wish to give our assets, ensuring that the government receives only its fair share, gaining the satisfaction of having our financial house in order, and knowing that we're not burdening our loved ones with an administrative nightmare.

On Wednesday, Oct. 19 from noon to 1 p.m., we'll be hosting a free, informative Webinar entitled "What's In Your Estate Plan? (And Is It Still Working For You?)." Led by my colleague, Christopher L. Cimijotti, CPA, manager, the session will focus on the basics of an estate plan, as well as how it needs to be reviewed and revised periodically in order to be effective.

Participants will learn how to take stock of their assets, including investments, retirement accounts, insurance policies, real estate and any business interests. Chris, who has has provided personal, estate and trust planning and business taxation services to an array of clients for more than 25 years, will also discuss what they want to achieve with those assets and who they wish to inherit them, as well as changes brought about by the late 2010 legislation.

PC-based attendees are required to have: Windows 7, Vista, XP or 2003 Server, while Macintosh-based attendees need Mac OS X 10.4.11 (Tiger) or newer.

Space is limited. Reserve your seat now by going to: https://www2.gotomeeting.com/register/932654882

After registering you will receive a confirmation email containing information about joining the session.

For more information, call (518) 785-0134, or drop me a note at kpo@marvincpa.com.

Cheers!

Tax Implications of Marriage Equality Act (TV Interview)

In my last post I outlined some of the key changes brought about by the recent passage of New York's Marriage Equality Act. To provide you with even more information about this sweeping measure, here's a TV interview featuring Kevin McCoy, CPA, managing partner and myself at TV-17 in Colonie -- http://vimeo.com/28509226 Richard Naylor is the host. I hope you find it helpful!

New Marriage Equality Act Raises Important Tax Concerns

It has been just over a month now since New York became the sixth state in the nation to allow same-sex couples to head to the altar to take their wedding vows.

The trailblazing Marriage Equality Act, which took effect on July 24, 2011, grants same sex couples the same legal rights as heterosexual couples and applies to all legally performed marriages regardless of where the ceremony took place.

With the passage of the bill, which applies to all taxes administered by the New York State Department of Taxation and Finance, are a host of tax-related considerations ranging from personal income tax to estate planning that need to be addressed in 2011 and 2012 by those couples entering into marriage.

The following questions and answers help shed light on key changes brought about by the new measure:

1. How do same-sex couples file their Federal and NYS tax returns?

For same-sex couples married before December 31, 2011, the 2011 tax returns filing status for NYS tax returns will be either Married Filing Joint or Married Filing Separate. Since the Federal government does not recognize same-sex marriages, the filing status for both individuals would be either Single or Head of Household, if qualified.

2. What is the added costs of the filing methods that are now required?

To complete the required New York return(s), a married same-sex couple must re-compute their Federal income tax return(s) using a married filing status, applying all the Federal rules for married taxpayers. That return should not be submitted to the IRS. The return(s) should only be used to complete your New York return(s) and kept it with your tax documents. Therefore, the cost of preparing at least one extra return will be incurred.

It’s a good idea that couples prepare their NYS tax returns using both statuses to determine which method gives them the best benefit.

3. I understand that some of the benefits available to heterosexual couples are available to same-sex couples such as domestic partner health insurance coverage. How does this change impact the tax circumstances of married same-sex couples?

The cost incurred by an employer providing health insurance to married or unmarried same-sex couples is taxable to the employee for Federal purposes and is included in the employee’s Form W-2. For married same-sex couples, that cost will not be taxable for NYS purposes and will need to be adjusted on the NYS income tax return filing of the employee.

4. When someone dies there can be Estate Tax issues to deal with. Are there any changes to that part of the law that impact married same-sex couples?

For New York State Estate Tax purposes, a surviving same-sex spouse will be allowed all the same deductions and elections allowed for different-sex spouses whether or not a Federal Estate Tax Return Form 706 is filed for the decedent. This allows a same-sex spouse decedent to pass an unlimited amount of assets to his/her surviving spouse free of NYS estate taxes if the estate elects the unlimited marital deduction provision.

All married same-sex couples should consult with their attorney to prepare an appropriate will and related documents.

5. Is there anything that same-sex couples need to do now to prepare for the impacts on their 2011 tax filings?

Because of some of the changes mentioned earlier, an employee should consider revising his/her NYS withholding information with their employer to reflect the new filing status, dependency exemptions and income or deduction changes.

You may want to file a new Form IT-2104, Employee’s Withholding Allowances Certificate, with your employer because you’ll file a New York return using a married status beginning in tax year 2011. It’s a good idea to provide proof to your employer that you’re legally married to have them change the withholding of New York taxes.

If you make estimated tax payments, you should re-compute your estimate based on a married filing status.

As mentioned earlier, for personal income tax purposes, the Act is effective for tax years ending on or after July 24, 2011. Same-sex married couples who are married as of December 31, 2011, will be considered married for the entire year. They must file their returns using a married filing status starting in tax year 2011. The Act is not retroactive. Therefore, a same-sex married couple who was legally married in another state prior to July 24, 2011, is not married for New York tax purposes until July 24, 2011, and may not use a married filing status prior to tax year 2011.

TAX AUDIT UPDATE WEBINAR SET FOR 8/17

Mounting pressure on annual budgets has caused many tax authorities to rethink what they’re auditing and how they’re conducting those audits. These changes have resulted in headaches for business and individual taxpayers alike.

On Wednesday, August 17 from noon to 1 p.m., my colleague, Tom Donovan, CPA, will host a free, informative Webinar designed to shed light on the latest changes in tax audits, as well as income and sales tax matters. The session qualifies for CPE credit.

“Tax audits come in a variety of sizes and colors,” said Tom, who represents many of our clients undergoing State or Federal tax audits. “This interactive Webinar will allow participants to ask questions and get answers to some of the things that may be keeping them up at night.”

Some of the types of questions he plans to discuss include:

• What can we do to be better prepared in case one of those “letters” arrives in the mail?
• I live and work in New York and travel to Georgia and California on a regular basis to meet with some customers. To which states do I owe income tax?
• What’s the statute of limitations for both me and my tax return?
• My neighbor did not pay sales tax when he put that new roof on his house, but Lowes charged me sales tax when I bought shingles for my house! What’s up with that?
• It seems that we’re being audited for something every year. Are we being targeted or singled out?

PC-based attendees are required to have: Windows® 7, Vista, XP or 2003 Server, while Macintosh®-based attendees need Mac OS® X 10.4.11 (Tiger®) or newer.

Space is limited, so reserve your seat now by going to: https://www2.gotomeeting.com/register/492862154

After registering you'll receive a confirmation email containing information about joining the session.

For more information, drop me a line at kpo@marvincpa.com.

2011 Business Tax Ideas Focus of 7/27 Webinar

As the second half of the year gets underway, there are specific deductions that all businesses should consider taking advantage of, as well as important timing issues related to those deductions.

On Wednesday, July 27th from noon to 1 p.m., we'll host an informative, free Webinar designed to lead companies though some of the key deductions that are available.

We'll give participants a step-by-step guide to various business tax ideas they need to know about before the end of the calendar year, since it's never too early to start thinking about tax planning.

The Webinar also qualifies for CPE credit.

PC-based attendees are required to have: Windows 7, Vista, XP or 2003 Server, while Macintosh-based attendees need Mac OS X 10.4.11 (Tiger) or newer. Space is limited. Reserve your seat now by going to: https://www2.gotomeeting.com/register/427448795

After registering you will receive a confirmation email containing information about joining the session. For more information, call 518-785-0134, or email me at kpo@marvincpa.com.

Great event for an even better cause!!!