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Tax Tips for September

  • President Obama to propose extension of Bush income tax cuts for all filers except singles with incomes over $200,000 and married couples with incomes above $250,000.
     
  • The 36% and 39.6% tax brackets would be reviewed in 2013 along with the limitation on itemized deductions for upper income taxpayers and personal exemption phase out.
     
  • Capital gains would return to 20% in 2013 for these high income filers, dividends would be taxed as ordinary income.
     
  • President Obama is trying to paint Republicans into a corner on taxes. He thinks he can score political points by emphasizing that higher-incomers should pay more tax.
     
  • A reminder to employees about taking business expenses on Schedule A. Any expenses that an employer would have reimbursed are not Form 2106 deductible.
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The Service is expanding its audit guide for cash intensive businesses. The handbook also contains chapters on other businesses. bail bondsmen, beauty shops, scrap metal firms, car washes, arcades, mini-marts and laundromats.

Reminder to preparers of returns claiming the earned income tax credit: The due diligence checklist has to be submitted with the filed return, beginning with returns filed in 2012. Before, preparers had to complete Form 8867.

 

Copyright © 2016 Glen J. Belush, CPA