2012 Standard Mileage Rates
December 30, 2011 | 
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Mileage Rates for 2012 (per mile):
| Business Purposes | 55.5 cents/mile |
| Moving or Medical Purposes | 23 cents/mile |
| Charitable Purposes | 14 cents/mile |
Most of the mileage rates for 2012 are the same as 2011, or the mid-year adjusted rate.
Questions about 2012 planning?
sarah.sedlak@glassjacobson.com
More Last Minute Tax Strategies
December 27, 2011 | Subscribe to our RSS Feed
Continued from last week’s post on 4 tax saving strategies, here are a few more ideas, plus some additional details on the ones we already talked about.
Updates:
- Make a charitable contribution. Check out this IRS publication for more information on which records to save. Any clothes or household goods donated must be in good condition to be deductible. Credit card donations make before 12/31 are deductible even if you don’t pay the bill until 2012.
- Contributing to retirement plans: though and deferrals made to employer sponsored plans must be made by 12/31, you have until April 17, 2012 to set up a new IRA or add money to an existing account and still have it count towards 2011.
Some new ideas:
- Bad year for your investment portfolio? You can normally deduct losses up to the amount of your capital gains, plus $3000 from other income. If your net losses are more than $3,000, the excess can be carried forward and deducted in future years.
- Improve your home’s energy efficiency. Installing insulation, water heaters or new windows could translate into a $500 tax credit. If you are looking at alternative energy for your home, the Residential Energy Efficient Property Credit equals a 30% credit on the cost of solar, wind, geothermal or heat pump equipment.
- Employers, don’t forget the Health Care Tax Credit: if you pay at least half of your employee’s health insurance premiums, you may qualify. Check out this previous post to determine your eligibility.
Contact us to make sure you are taking advantage of all these opportunities:
sarah.sedlak@glassjacobson.com
Payroll Tax Logjam- What Should Business Owners Do?
December 23, 2011 | Subscribe to our RSS Feed
The latest infighting on Capitol Hill over extending the payroll tax could have an immediate impact on average Americans.
Details over which party wants what aside (a 2 month extension, a year extension, an oil pipeline (??)), the payroll tax affects 160 million Americans. If the payroll tax is not extended, it would cost the American family making $75,000 per year an extra $1,500 in taxes. This could be a tricky time for a tax increase of this magnitude, with the economy still in a fragile state and unemployment high.
The National Payroll Reporting Consortium’s president, Pete Isberg has now weighed in, writing that complex payroll systems may require “at least 90 days for a change of this magnitude for software testing alone, not to mention analysis, design, coding and implementation.” The NRPC worries that a two month extension would be less feasible than at least a quarter of the calendar year.
At Glass Jacobson, we certainly cannot predict how this latest battle will shake out. We are as frustrated with this “political” inaction as are all of our clients. It is a real shame that given the real challenges in our economy that are truly beyond anyone’s control, our politicians continue to add problems that they could fix. As more information becomes available, we will update and advise our clients accordingly. Stay tuned.
Questions?
michael.cohen@glassjacobson.com
Four Last Minute Tax-Saving Strategies
December 22, 2011 | Subscribe to our RSS Feed
Here are some last minute tax saving strategies, although some may be dependent on the timing of certain political or economic events!
1. Capital Gains:
Long-term capital gains continue to be taxed at favorable rates through 2012, with middle- and higher-income investors taxed at a maximum rate of 15 percent. Low-income tax payers in the 10 and 15 percent brackets for ordinary income have a zero-percent rate, meaning they do not pay tax on any long-term gains or qualified dividends. Selling now (or in 2012) is sensible if the investor wants to cash in capital gains.
If you are looking for long-term rates, investors are required to hold an asset for longer than one calendar year. It remains to be seen what Congress will do about the capital-gains increase in 2013, and absent of any action, tax rates will go up. Investors may want to consider purchasing assets before the end of 2011 so they can sell before 2013, while they are still guaranteed favorable rates.
2. Stock Sales
Investors should remember that stock is treated as sold on the trade date. So, if you sell stock on December 29, 2011 but the settlement date is not until January, the gains and losses from the sales would still be recognized on the 2011 tax return.
3. Retirement Account Contributions
One quick strategy to reduce tax liability is to make a contribution to a traditional retirement account (IRA, 401(k), 403(b), SIMPLE IRA or SEP plan) and take advantage of the deductions. Traditional IRAs are particularly easy to set up.
4. Charitable Giving
If you plan on deducting a charitable contribution, remember that the IRS requires the taxpayer to maintain a bank record or receipt.
For any contribution of $250 or more, the taxpayer must obtain and keep records of written acknowledgment from the qualified organization. Documentation for property with higher values requires an appraisal.
Contact us if you need help with planning or have questions. Now is the time!