Archive for the ‘General’ Category

« Older Entries

If you own foreign investments, you may have an additional federal tax filing requirement this year. Read more

Friday, February 3rd, 2012

If you own foreign investments, you may have an additional federal tax filing requirement this year.

Form 8938, “Statement of Specified Foreign Financial Assets,” is due April 17, 2012, and is filed as part of your individual tax return. You’ll use Form 8938 to disclose interests in certain foreign financial accounts when your ownership exceeds the reporting requirements.

What are the reporting requirements? They vary depending on where you live and your filing status. For example, say you’re married and live in the United States, and you’ll file a joint tax return for 2011. You’ll include Form 8938 with your tax return when the total value of your reportable assets on the last day of 2011 is more than $100,000, or if the value exceeds $150,000 at any time during the year.

Tip: In some cases, you may also need to file Form 8938 for tax year 2010.

Reportable assets include investment accounts you own that are held in foreign financial institutions, interests in foreign entities, and stocks or securities issued by foreign individuals or companies.

You’ve probably noticed the reporting requirements are similar to the “Report of Foreign Bank and Financial Accounts” (FBAR), a separate return you may already be filing. Be aware the new Form 8938 does not replace the FBAR, which you’ll still need to complete by June 30.

Penalties for failure to file Form 8938 start at $10,000. We urge you to contact us so we can help you evaluate your filing requirements for foreign investments.

David Bradsher, CPA is a Washington DC / Northern Virginia area CPA who works with small business owners and non profit leaders on a monthly basis to provide them with guidance and advice on how to grow their organizations, minimize their tax liabilities and increase their bottom line.

Posted in Accounting, General, Individual Tax Issues, Tax Preparation, Tax Updates | No Comments »

Rundown of 2012 Tax Law changes

Thursday, January 5th, 2012 
* PAYROLL TAX CUT for employees extended through February
 29, 2012. (Social security tax rate on wages up to
 $110,100 will be 4.2% rather than 6.2%.)
* ADOPTION TAX CREDIT decreases to $12,650 for adoption
 of an eligible child.

* SECTION 179 maximum deduction decreases to $139,000,
 with a phase-out threshold of $560,000.

* STANDARD MILEAGE RATE for business driving remains at
 55.5¢ a mile. Rate for medical and moving mileage
 decreases to 23¢ a mile. Rate for charitable driving
 remains at 14¢ a mile.

* ESTATE TAX top rate remains at 35%, and the exemption
 amount increases to $5,120,000. The ANNUAL GIFT TAX
 EXCLUSION remains at $13,000.

* 401(k) maximum salary deferral increases to $17,000
 ($22,500 for 50 and older).

* SIMPLE maximum salary deferral remains at $11,500
 ($14,000 for 50 and older).

* IRA contribution limit remains at $5,000 ($6,000 for
 50 and older).

* KIDDIE TAX threshold remains at $1,900 and applies up
 to age 19 (up to age 24 for full-time students).

* NANNY TAX threshold increases to $1,800.

* TRANSPORTATION FRINGE BENEFIT limit decreases to $125
 for vehicle/transit passes and increases to $240 for
 qualified parking.

* SOCIAL SECURITY taxable wage limit increases to
 $110,100. Retirees under full retirement age can earn
 up to $14,640 without losing benefits.

* HSA CONTRIBUTION limit increases to $3,100 for
 individuals and to $6,250 for families. An additional
 $1,000 may be contributed by those 55 or older.

David Bradsher, CPA is a Washington DC / Northern Virginia area CPA who works with small business owners and non profit leaders on a monthly basis to provide them with guidance and advice on how to grow their organizations, minimize their tax liabilities and increase their bottom line.

Tags:
Posted in General, Individual Tax Issues, Tax Preparation, Tax Updates | No Comments »

New Years Resolution – Do your beneficiary choices need updating?

Sunday, January 1st, 2012

Are your beneficiary designations up to date? Do you even know which accounts have beneficiaries and who you’ve designated? It’s easy to lose track. But it’s important to keep them current. Here’s why.

When you designate a beneficiary for an account, that person inherits the assets in the account, regardless of what your will might say. That’s why updating your will periodically might not be enough. Typically, you’ll have beneficiaries for each of your IRAs, your 401(k) or other retirement plans, annuities, and insurance policies.

Your designations could be out of date just because of life’s changes. Since you made your initial choices, you might have married, had children, or divorced. Some of the beneficiaries you chose could have died, divorced, or married. Their circumstances could have changed so you no longer want them to be the beneficiary.

Also, the tax laws change frequently, and they can have an impact on your choices. Choosing the wrong beneficiary, or failing to name a contingent beneficiary, can affect the long-term value of your IRA assets after you die. That’s why it’s important to review your choices with tax consequences in mind.

Here’s how to update your designations. At a minimum, you should have copies of your beneficiary designations in one place. If you don’t, call the trustees of your retirement accounts and your insurance agent, and request copies.

Then review the documents and decide what changes you’d like to make. Make an appointment to review your decisions with your tax and estate planning advisor. Discuss matters such as naming secondary beneficiaries and naming your estate as a beneficiary (sometimes not a good idea).

Finally, send your changes to the account trustee, ask for a confirmation, and keep copies in your records. For any assistance you need, contact our office.

David Bradsher, CPA is a Washington DC / Northern Virginia area CPA who works with small business owners and non profit leaders on a monthly basis to provide them with guidance and advice on how to grow their organizations, minimize their tax liabilities and increase their bottom line.

Posted in General, Investing | No Comments »

Residential energy credit expires soon

Wednesday, December 14th, 2011

Claim the last of the residential energy credit. Install certain energy efficient property in your home by year-end (such as insulation, doors, and windows) and get a federal tax credit of up to $500. That’s the aggregate total credit, including amounts you claimed in prior years. The credit is scheduled to expire after December 2011.

David Bradsher, CPA is a Washington DC / Northern Virginia area CPA who works with small business owners and non profit leaders on a monthly basis to provide them with guidance and advice on how to grow their organizations, minimize their tax liabilities and increase their bottom line.

Posted in Accounting, General | No Comments »

« Older Entries