Tax Planning & Compliance Blog

New Tax Credit

Are you ready to take advantage of the new InvestOhio tax credit?  The registration period is now open and registration must be completed before you can apply for the credit. The application date is expected to be the first full week in December and now is the time to ensure that you are ready to apply.
 
What is InvestOhio?

InvestOhio is a tool for helping Ohio small businesses gain the capital they need to succeed and create jobs.  Through the program, individuals who invest up to...

Tax planning for the year ending 2011 and beyond will again prove challenging due to uncertainties over whether Congress will enact sweeping tax reform.  And even if there’s no major tax legislation, Congress will have to deal with the “patch” to the alternative minimum tax, and decide what to do about the expiring of the Bush-era income tax cuts.

Regardless of what Congress does late this year or early the next, there are solid tax savings to be realized by taking advantage of tax breaks that...

Year-end tax planning is especially challenging this year because of uncertainty over whether Congress will enact sweeping tax reform that could have a major impact in 2012 and beyond.  Regardless of what Congress does late this year or early the next, there are solid tax savings to be realized by taking advantage of four tax breaks that are on the books for 2011 but may be gone next year unless they are extended by Congress: 

• Option to deduct state and local sales and use taxes instead of state...

There’s one word that can be used to describe the stock market as well as estate and gift tax laws over the past few years and that is “volatile”  Unfortunately, volatility often scares clients into taking the “wait and see” approach but in reality, there’s no time like the present to do some estate planning and make lifetime gifts.

What are the current laws:

• Beginning January 1, 2011, the federal estate, gift, and generation-skipping transfer tax exemptions were all set at $5 million with a top...

Several tax breaks are on the books for 2011 but may be gone next year unless they are extended by Congress. One of them is the small energy credit.

• What it is:  Credit of up to $500 total and $200 for windows for the installation of energy efficient doors, windows, furnaces and air conditioning units, to your main home (includes boats, motorhomes, condominiums) if the items are installed before 2012.  This credit is reduced by the amount of energy tax credits taken from 2006-2010.
• Who it applies...

Several tax breaks are on the books for 2011 but may be gone next year unless they are extended by Congress. One of them is tax free distributions by those age 70 ½ or older for charitable purposes.

• What it is: Taxpayers who have reached age 70 ½ can make a distribution of up to $100,000 directly (by the trustee of the IRA) from the IRA to a charitable organization.  The distribution is not taxable and the charitable deduction is not allowed, but the distribution counts towards a taxpayer’s...

Several tax breaks are on the books for 2011 but may be gone next year unless they are extended by Congress. One of them is the above the line deduction for qualified higher education expenses.

• What it is: 
  - American Opportunity Credit - taxpayers have the option of either deducting higher education expenses or taking a credit for them of up to $2,500 per student.  This credit is partially refundable (40%). 
  - Lifetime Learning Credit - taxpayers have the option of either deducting higher...

Several tax breaks are on the books for 2011 but may be gone next year unless they are extended by Congress. One of those is the option to deduct state and local sales and use taxes instead of state and local income taxes.

• What it is:  Currently, taxpayers have the ability to deduct, as an itemized deduction, either State and Local sales tax or State and Local income tax.
• Who it applies to: Although this deduction usually applies to our snow birds that have moved their residency to Florida,...

According to the IRS, if you plan to travel, or have traveled, on or after July 23, 2011, and you purchased your ticket on or before July 22, 2011, you are entitled to a refund for the federal air transportation excise taxes that was paid when you purchased your ticket.

Airlines are now permitted to refund the tax to the passenger, just as they do in the ordinary course of business when issuing refunds for unused refundable tickets (including the associated taxes). Because the airlines and travel...

ODJFS recently issued 1099-G tax forms to those individuals who received unemployment benefits in 2010. On these forms is an "Instructions for Recipient" section that contains outdated instructions. Additional notices are currently being issued to ensure that all individuals receive accurate instructions.

One example of the form's outdated instructions: Box 1 indicates that recipients should "report amounts in excess of $2,400 as income on the unemployment compensation line of your tax return."...

It's like a game of hide and seek for wealthy Americans.  In 2001, the Internal Revenue Service estimated that Americans owed $345 billion more in tax than they paid, or about 14% of federal revenues from fiscal year 2001.  Where were these tax dollars hiding?  The U.S. government is betting a good portion is hiding in the Swiss Alps. 

In an unprecedented move, the Swiss Justice Department agreed to disclose the names of 4,450 UBS account-holders from 2001 to 2008 that contained more than...