Capital Gains Strategies

One of the greatest benefits of the tax code is the special tax rates that currently apply to gain recognized from the sale of capital assets held for more than a year (long-term). The special tax rates apply to virtually all capital assets including land, improved real estate, your main and vacation homes, and business assets in excess of the accumulated depreciation previously deducted. These special long-term capital gains (LTCG) rates for 2010 are 0% (yes that is correct - zero) to the extent your regular tax rate is in the 15% or 10% brackets...

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Rental Owners Need to Prepare for the New 2011 Reporting Requirement

If you are a rental owner and during 2011 make payments of $600 or more to a service provider (such as a plumber, painter, or accountant) in the course of earning rental income, the 2010 Small Business Jobs Act says that you are required to provide an information return (typically Form 1099-MISC) to IRS and to the service provider. In order to do that, you must obtain the payee's name, SSN and contact information before making payment. The IRS provides Form W-9 for that purpose.There is a "Catch-22" you need to watch out for. Suppose you call...

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New Roth IRA Opportunities

2010 is the first year in which taxpayers—including married taxpayers filing separately—are able to convert funds in regular IRAs (including SEP and Simple IRAs) to Roth IRAs, regardless of income level. This can provide a significant opportunity for certain taxpayers.There are several advantages to a Roth IRA - All future earnings and distributions at retirement generally will be tax-free, and Roth IRAs are not subject to the required minimum distribution rules. Because distributions from Roth IRAs are tax-free (if they are qualified distributions),...

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Beware of a New Fraud Risk!

There is a fraud risk related to the Electronic Federal Tax Payment System (EFTPS) that you need to be aware of.Always remember that the IRS does not initiate taxpayer contact by e-mail. Therefore, if you receive an e-mail that appears to be from a tax agency telling you that your federal electronic funds transfer (EFT) payment did not go through, it is part of a phishing scheme and you should not respond to it. The perpetrators of this scheme have duplicated the IRS's EFTPS logo and other characteristics of that system in an attempt to convince...

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Tax Rumors Abound

There are two false tax rumors that have been circulating around and troubling clients. To set the record straight, a brief explanation of both rumors is provided below.False Rumor #1 – "Employer-paid health insurance benefits will be taxable in 2011."Not true! Starting in 2011, the amount of employer-paid healthcare benefits was to be included on the W-2 as an information entry, but is not included in the taxable wages on the W-2. Many sources failed to properly analyze this requirement and reported that the benefits would become taxable in...

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Health Care Professionals Working in Underserved Areas May Qualify for Special Benefit

Under the Affordable Care Act, health care professionals who received student loan relief under state programs that reward those who work in underserved communities may qualify for refunds on their 2009 federal income tax returns, as well as an annual tax cut going forward.The Affordable Care Act included a change in the law, effective in 2009, that expands a tax exclusion for amounts received by health professionals under loan repayment and forgiveness programs. Prior to the new law, only amounts received under the National Health Service Corps...

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