Tax Planning & Compliance Blog

Deciding About a Roth IRA Conversion

Before you know it, the end of the year will be here. For many individuals contemplating a conversion from a traditional IRA to a Roth IRA, it is time to make some critical decisions.

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Hiring Your Child: Answers to Tax FAQs

Suppose that your child needs an after-school job while your company is looking to hire extra help. Practical solution: If you are in a position of authority, you could put your child on the payroll.

There are several tax incentives for hiring a child to work for your business. In effect, you are "splitting income," by paying your child a salary instead of taking compensation and paying the child an allowance. In addition, your child may be in line for fringe benefits. Of course, the wages paid to the child are deductible by the business.

Here are the answers to some frequently asked questions on this topic.
 
Introduction to New Basis Reporting Rules

New basis reporting rules required by a 2008 law will ease some of the burden for establishing gains and losses from securities sales. But the new rules will coexist with the old rules, so it is still important to retain the necessary records. The IRS recently issued new proposed regulations on this complex issue. 

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Aurum Capital Markets Summary

Please click here for a summary from Aurum Wealth Management Group on the performance of the major market indices through the end of July as well as a recap of the significant events influencing the markets.

Advanced Earned Income Credit Repealed

On August 10th, President Obama signed into law a provision of HR 1586 that repealed the Advance Earned Income credit.

According to the American Payroll Association:
"For tax-year 2011 and beyond, there will be no more advance payment of the earned income tax credit. Eligible individuals will still be able to claim it on their personal income tax returns, but employers may no longer advance a portion of it with each paycheck.

Besides requiring that this function of payroll systems be turned off, payroll professionals will need to communicate this change to their employees. Although it has not yet been officially announced by the Internal Revenue Service, this should involve a change to Forms W-2, W-3, 941, and 944, and the elimination of Form W-5. Forms W-2c, W-3c, 941-X, and 944-X will likely retain the box or line related to the advance earned income credit at least until the statute of limitations closes on tax-year 2010 (April 15, 2014)."

For more payroll news and updates, visit PayTech Online.

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