The IRS announced today that there are $760 million in refunds for people who didn't file their 2010 income tax returns. "Refunds totaling almost $760 million may be waiting for an estimated 918,600 taxpayers who did not file a federal income tax return for 2010. However, to collect the money, a return for 2010 must be filed with the IRS no later than Tuesday, April 15, 2014."
As a matter of fact, I am meeting with someone next week to talk about preparing her 2010 income taxes. We believe there is a refund to be claimed.
This reminds me of Gleason's four rules of tax procrastination along with some of and their corollaries:
1. If you procrastinate long enough, the need to perform the task may go away. Corollary: You may die suddenly, and whatever it was that you didn't get around to doing, now just isn't going to get done.
2. The need to file a tax return doesn't go away, even if you die. Corollary: Someone else will have to take care of it for you.
3. Tax returns are never easier to prepare or file after they are long past due. Corollary: It's more difficult and time-consuming to gather the information to prepare a complete and accurate return years after the fact than it is right after the end of the year.
4. Filing your taxes late is illogical and more inconvenient than filing them on time.
- Mark S Gleason CPA
www.lakes-cpa.com
Saturday, March 22, 2014
Friday, March 21, 2014
Wealthy Taxpayers are Now Paying More in Taxes
Taxpayers having incomes that exceed 97% of all the other taxpayers' incomes are being hit with some new taxes for 2013.
Many of them (not my cients - they were all informed) are just finding out about these new tax hits as they prepare to file their 2013 tax returns.
First, the special reduced rate of tax for capital gains has been bumped up to 20% (from 15%) for married couples with incomes over $450,000 ($400,000 for singles).
Second, Medicare taxes are being increased from 1.45% to 2.35% on wages in excess of $250,000 for married taxpayers ($200,000 for singles).
In addition, there is a new 3.8% Medicare tax on investment income. This new tax applies to the lesser of: (a) taxable investment income or (b) the amount by which their adjusted gross income exceeds $250,000 for married couples ($200,000 for singles). Investment income includes dividends, interest, rental income, capital gains and annuities.
Third, personal exemptions and itemized deductions for married taxpayers with adjusted gross incomes in excess of $300,000 ($250.000 for singles) are reduced. The "phase-out" of personal exemptions eliminates 2% of the personal exemption deduction for each $2,500 that adjusted gross income exceeds the $300,000/$250,000 thresholds. Itemized deductions are "phased-out" by reducing total itemized deductions by 3% of the amount adjusted gross income exceeds the $300,000/$250,000 thresholds. This reduction is limited to 80% of total itemized deductions.
- Mark S Gleason CPA
www.lakes-cpa.com
Many of them (not my cients - they were all informed) are just finding out about these new tax hits as they prepare to file their 2013 tax returns.
First, the special reduced rate of tax for capital gains has been bumped up to 20% (from 15%) for married couples with incomes over $450,000 ($400,000 for singles).
Second, Medicare taxes are being increased from 1.45% to 2.35% on wages in excess of $250,000 for married taxpayers ($200,000 for singles).
In addition, there is a new 3.8% Medicare tax on investment income. This new tax applies to the lesser of: (a) taxable investment income or (b) the amount by which their adjusted gross income exceeds $250,000 for married couples ($200,000 for singles). Investment income includes dividends, interest, rental income, capital gains and annuities.
Third, personal exemptions and itemized deductions for married taxpayers with adjusted gross incomes in excess of $300,000 ($250.000 for singles) are reduced. The "phase-out" of personal exemptions eliminates 2% of the personal exemption deduction for each $2,500 that adjusted gross income exceeds the $300,000/$250,000 thresholds. Itemized deductions are "phased-out" by reducing total itemized deductions by 3% of the amount adjusted gross income exceeds the $300,000/$250,000 thresholds. This reduction is limited to 80% of total itemized deductions.
- Mark S Gleason CPA
www.lakes-cpa.com
Saturday, March 15, 2014
¿Recién llegado a los Estados Unidos?
La informacion es del Internal Revenue Service:
Si usted está recién llegado a los Estados Unidos, deberá informarse sobre cuáles son sus responsabilidades tributarias. En esta página usted encontrará respuestas sobre quién tiene la obligación de presentar una declaración de impuesto federal en los Estados Unidos. Obtenga respuestas a las siguientes preguntas:
¿Cómo sé si tengo la obligación de presentar una declaración de impuesto federal en los Estados Unidos?
¿Determina mi estatus migratorio si debo o no pagar impuestos?
¿Qué beneficios obtendré al presentar una declaración de impuestos?
¿Existen multas por no presentar declaración?
Toda persona que resida en los Estados Unidos, reciba ingresos y cumpla con ciertos requisitos tiene la obligación de presentar una declaración de impuesto federal. La obligación de presentar la declaración no depende de su condición migratoria, sino más bien del nivel de sus ingresos. Presentar la declaración es la ley, y el no cumplir con ella le expone a sanciones, tanto civiles como penales.
La ley requiere un número de identificación a cada persona que aparezca en la declaración de impuesto federal. Por lo general, el Número de Seguro Social, expedido por la Administración del Seguro Social, es el número que aparece en la declaración de impuestos.
Si el contribuyente tiene la obligación de presentar una declaración de impuestos pero no cumple con los requisitos necesarios para obtener un Número de Seguro Social, el contribuyente, si reúne los requisistos, puede solicitar y obtener un Número de Identificación Personal del Contribuyente (ITIN) de parte del Servicio de Impuestos Internos para presentar la declaración.
Usted puede preparar y presentar su declaración por sí mismo o puede solicitar los servicios de algún profesional de impuestos. La declaración se puede presentar en formularios de papel y enviarse por correo. Algunos profesionales de impuesto ofrecen preparación y presentación.
- Mark S Gleason CPA
www.lakes-cpa.com
Si usted está recién llegado a los Estados Unidos, deberá informarse sobre cuáles son sus responsabilidades tributarias. En esta página usted encontrará respuestas sobre quién tiene la obligación de presentar una declaración de impuesto federal en los Estados Unidos. Obtenga respuestas a las siguientes preguntas:
¿Cómo sé si tengo la obligación de presentar una declaración de impuesto federal en los Estados Unidos?
¿Determina mi estatus migratorio si debo o no pagar impuestos?
¿Qué beneficios obtendré al presentar una declaración de impuestos?
¿Existen multas por no presentar declaración?
Toda persona que resida en los Estados Unidos, reciba ingresos y cumpla con ciertos requisitos tiene la obligación de presentar una declaración de impuesto federal. La obligación de presentar la declaración no depende de su condición migratoria, sino más bien del nivel de sus ingresos. Presentar la declaración es la ley, y el no cumplir con ella le expone a sanciones, tanto civiles como penales.
La ley requiere un número de identificación a cada persona que aparezca en la declaración de impuesto federal. Por lo general, el Número de Seguro Social, expedido por la Administración del Seguro Social, es el número que aparece en la declaración de impuestos.
Si el contribuyente tiene la obligación de presentar una declaración de impuestos pero no cumple con los requisitos necesarios para obtener un Número de Seguro Social, el contribuyente, si reúne los requisistos, puede solicitar y obtener un Número de Identificación Personal del Contribuyente (ITIN) de parte del Servicio de Impuestos Internos para presentar la declaración.
Usted puede preparar y presentar su declaración por sí mismo o puede solicitar los servicios de algún profesional de impuestos. La declaración se puede presentar en formularios de papel y enviarse por correo. Algunos profesionales de impuesto ofrecen preparación y presentación.
- Mark S Gleason CPA
www.lakes-cpa.com
Friday, March 14, 2014
Reduced Deduction for New Business Autos in 2014
With the end of bonus depreciation, which phased out at the end of 2013, the maximum deduction for depreciation on most automobiles for the first year is back down to $3,160.
The maximum deductions for the second and third years are now $5,000 and $3,500. The maximum annual deduction for years 4 and after is $1,875.
- Mark S Gleason CPA
www.lakes-cpa.com
The maximum deductions for the second and third years are now $5,000 and $3,500. The maximum annual deduction for years 4 and after is $1,875.
- Mark S Gleason CPA
www.lakes-cpa.com
Tuesday, March 4, 2014
The IRS is Issuing Health Care Tips
The IRS is Issuing Health Care Tips
to explain to people what they need to know about how the Affordable Care Act will affect their income tax returns.
This resource is found at:
http://www.irs.gov/uac/Newsroom/Health-Care-Tax-Tips2.
Most of the items discussed in this forum are related to individual taxpayers and how their taxes for years after 2013 are affected by health care.
- Mark S Gleason CPA
www.lakes-cpa.com
to explain to people what they need to know about how the Affordable Care Act will affect their income tax returns.
This resource is found at:
http://www.irs.gov/uac/Newsroom/Health-Care-Tax-Tips2.
Most of the items discussed in this forum are related to individual taxpayers and how their taxes for years after 2013 are affected by health care.
- Mark S Gleason CPA
www.lakes-cpa.com
Monday, March 3, 2014
Minnesota K-12 Education Credit
The Minnesota Department of Revenue issued a reminder on it's Weekly Digest Bulletin about problems they are having with taxpayers claiming the K-12 education credit for items that do not qualify.
Here is what their bulletin said:
Minnesota offers a refundable education credit that reduces a taxpayer's income tax liability. Taxpayers who meet the criteria can qualify to claim it. We frequently see expenses claimed that do not qualify for the credit. Avoiding these common errors will help the taxpayer get their refund sooner.
Examples of expenses we see taxpayers claiming that DO NOT qualify include:
School uniforms including choir, band, dance, and graduation robes,
Fees for athletic programs including swimming and gymnastics,
PSAT, ACT, and SAT testing fees,
Computer hardware and/or software claimed for the full value (expenses are limited to $200 on line 14 of the M1ED),
Recreational programs such as Boy Scouts and Girl Scouts.
What they didn't say is that because a majority of the claims for this credit claim the credit for ineligible expenses, each one of these claims is manually examined (audited). This was true some years ago and I don't know if it's still true, but this has been an ongoing problem for the MN Dept of Revenue. When I was a member of the MN House of Representatives during the Ventura years, the Department of Revenue wanted to repeal this credit because of the administrative headaches caused by all the ineligible claims.
Mark S Gleason CPA
www.lakes-cpa.com
Here is what their bulletin said:
Minnesota offers a refundable education credit that reduces a taxpayer's income tax liability. Taxpayers who meet the criteria can qualify to claim it. We frequently see expenses claimed that do not qualify for the credit. Avoiding these common errors will help the taxpayer get their refund sooner.
Examples of expenses we see taxpayers claiming that DO NOT qualify include:
School uniforms including choir, band, dance, and graduation robes,
Fees for athletic programs including swimming and gymnastics,
PSAT, ACT, and SAT testing fees,
Computer hardware and/or software claimed for the full value (expenses are limited to $200 on line 14 of the M1ED),
Recreational programs such as Boy Scouts and Girl Scouts.
What they didn't say is that because a majority of the claims for this credit claim the credit for ineligible expenses, each one of these claims is manually examined (audited). This was true some years ago and I don't know if it's still true, but this has been an ongoing problem for the MN Dept of Revenue. When I was a member of the MN House of Representatives during the Ventura years, the Department of Revenue wanted to repeal this credit because of the administrative headaches caused by all the ineligible claims.
Mark S Gleason CPA
www.lakes-cpa.com
Sunday, March 2, 2014
Free Tax Preparation Assistance
Free in-person tax preparation assistance is currently being offered through two programs sponsored by the IRS. VITA (Volunteer Income Tax Assistance) is available to taxpayers having income of $52,000 or less. I have been a a VITA volunteer for one day each almost every year the past 15 years.
TCE (Tax) Counseling for the Elderly is for seniors over 60. To find a location near you, go to irs.treasury.gov/freetax-prep. It's best to call ahead for an appointment at most locations because the hours are limited.
Here in Minnesota, we also have AccountAbility Minnesota, a notn-profit that provides free tax assistance for low-income taxpayers. AccountAbility Minnesota offers appointments at two locations at 2610 University Ave W, Ste 450, St Paul, MN 55114 and at 2100 Plymouth Ave N, Minneapolis, NN 55411. Other locations are first-come, first-served. Visit www.accountabilitymn.org for more information.
Free tax preparation software is available from the IRS via "Free File" for taxpayers with income below $58,000. Electronic versions of IRS forms (pdf format) are available at www.irs.gov
- Mark S Gleason CPA
www.lakes-cpa.com
TCE (Tax) Counseling for the Elderly is for seniors over 60. To find a location near you, go to irs.treasury.gov/freetax-prep. It's best to call ahead for an appointment at most locations because the hours are limited.
Here in Minnesota, we also have AccountAbility Minnesota, a notn-profit that provides free tax assistance for low-income taxpayers. AccountAbility Minnesota offers appointments at two locations at 2610 University Ave W, Ste 450, St Paul, MN 55114 and at 2100 Plymouth Ave N, Minneapolis, NN 55411. Other locations are first-come, first-served. Visit www.accountabilitymn.org for more information.
Free tax preparation software is available from the IRS via "Free File" for taxpayers with income below $58,000. Electronic versions of IRS forms (pdf format) are available at www.irs.gov
- Mark S Gleason CPA
www.lakes-cpa.com
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