Tax Planning & Preparation

While the real estate market has been improving, many homeowners may still find their home value is less than their original purchase price.  There are many important tax consequences as a result of the conversion. 

Once you decide to convert to rental, you will be allowed to depreciate the property over 27.5 years.  Depreciation can shelter some or all of your rental income by providing you noncash deductions.  Depending on your specific facts, you may be able to use losses from your rental...

It’s fun to share pictures and details of your life on Facebook, showing off your new car or 32-foot sailboat, your Caribbean cruise, expensive purchases or Vegas winnings.  However, your friends and family aren’t the only ones able to see and read about your good fortune.  Did you know you have an unknown, unapproved, and uninvited “friend” who is able to view everything you post, tweet or click? —the Internal Revenue Service. Besides being cautious on Facebook, think twice before sending an...

Ohio has one of the most complicated municipal tax systems in the country. Each year at tax time, it’s a costly burden for taxpayers across the state, especially business owners who operate in multiple municipalities. The Municipal Tax Reform Coalition, a group of 25 organizations across the state, is working to change that.

The group is supporting HB 5, sponsored by Rep. Cheryl Grossman (R-Grove City) and Rep. Michael Henne (R-Clayton). The legislation will achieve the goals of any good tax...

Last week, the IRS provided guidance for transitional relief of late payment penalties due to the delayed publication of some IRS forms relating to the 2012 tax year.  As a result of the American Taxpayer Relief Act of 2012, which was signed into law on January 2, 2013, many tax forms were delayed. These delays may have affected the ability of some taxpayers to timely estimate and pay their 2012 tax liability when requesting an extension to file.

For each taxpayer who has requested or will...

If you’ve misclassified your workers as independent contractors that should have been classified as employees, the IRS now has a Voluntary Classification Settlement Program (VCSP). This is part of its "Fresh Start" initiative and allows business owners to come forward and settle their misclassification issues.

The advantages of using VSCP include:

1. The business can reclassify workers as employees for future periods and pay only 10% of the employment tax liability for the most recent year
2. There are...

Typically, if you have debt that is forgiven or cancelled, it results in taxable income to you.  However there is an exception to this rule for certain mortgage debt forgiven in 2012.  Cancelled debt from "qualified principal residence indebtedness" may be excluded from income. 

• Qualified principal residence indebtedness is mortgage debt taken out to buy, build or substantially improve your main home. 
• The debt must also be secured by your main home. 
• The maximum amount of debt that may be excluded...

This month's Tax Advisory Insights includes the following:

• Municipal Tax Reform
• New Medicare Taxes in 2013 Affect Higher Income Individuals
• New Simplified Option for Claiming Home Office Deduction
• The Fundamentals of 529 Plans
• Tax "Savings" After the Fiscal Cliff

Municipal Tax Reform

Ohio House Bill 5, which would establish uniform municipal income tax rules, was introduced on January 30, 2013. Tax Principal, Amy J. Gibson, CPA, was recently interviewed by the Plain Dealer for an article on this...

When President Obama signed the American Taxpayer Relief Act (ATRA) into law in January, the much-feared “fiscal cliff” was avoided, for the most part.

What item most benefits individuals?

Signage of the act provides permanent relief from the Alternative Minimum Tax (AMT). If the AMT ‘patch’ had not been put in place, as many as 30 million taxpayers could have been affected. Fortunately, a permanent AMT patch has been put in place.

Retroactively, effective for tax years beginning after 2011,...

This past January, we kicked off our Skoda Minotti Speakers Series in Cleveland and Tampa discussing the 2013 Tax Updates - The American Taxpayer Relief Act & The Fiscal Cliff.  Topics discussed included:

• Business Tax Changes for 2013
• Personal Tax Changes for 2013
• Planning for the 3.8% Medicare Tax

Click here for your free copy of the presentation which was delivered by Michael Minotti, CPA and Partner.

Stay tuned!

Our March presentation will feature John Kallmeyer, Director of Visual Marketing at S...

This month's Special Delivery includes:

• Update Your Email Preferences
• Key Tax Elections on 2012 Returns
• A "Perfect Storm" of Tax Deductions
• New IRS Program for Misclassified Workers
• Obama Signs Cybersecurity Executive Order
• Free Life Sciences E-Book: Delivering the Right Message Throughout the FDA Approval Process
   

Update Your Email Preferences

As business advisors, we want to make sure we are providing our clients and business contacts with messages and updates relevant to your individual and/or...

The Marketplace Fairness Act of 2013 (the “Act”) was introduced in the U.S. House of Representatives and the U.S. Senate on February 14, 2013.  The Act would give states the option to require the collection of sales and use taxes owed by remote sellers if the remote seller has gross annual receipts in total remote sales in the United States for the preceding calendar year of more than $1 million. Under current law, states rely on consumers to track and self-remit use taxes.

According to the...

Ohio House Bill 5, which would establish uniform municipal income tax rules, was introduced on January 30, 2013.  A similar bill was introduced last October but failed to pass the House before the last legislative session ended in December.

Ohio is one of a handful states where municipalities assess individual and business income tax and the only state where almost 600 cities and villages create their own definitions of income and their own sets of rules and regulations.

Ohio’s current municipal...

Phase II of the qualifying advanced energy program is now in effect by re-allocating Phase I credits that remain.  The IRS just announced that $150 million are available under this program for clean energy and energy efficiency manufacturing projects in the United States.  To be considered for any of these credits, taxpayers must submit concept papers to the US Department of Energy (DOE) by 4/9/13 and applications to the DOE and IRS by 7/23/13.

Below are definitions per the Notice.

A qualifying...

When Congress passed the American Taxpayer Relief Act of 2012 on January 2, 2013 (read the contradiction there), most taxpayers breathed a sigh of relief.  The tax rules for 2012 and 2013 were now known and for most taxpayers, and many of the deductions and credits they've come to know and love were extended.  Accountants, on the other hand, knew life wasn't so rosy. 

For one, the IRS just started accepting and processing individual income tax returns as of January 30th.  This is two weeks later...

The American Taxpayer Relief Act of 2012 (the Act) extends the Section 41 Research & Experimentation Tax Credit (or the R&D Tax Credit) for two years retroactively from January 1, 2012 - December 31, 2012.  In addition, the Act clarifies the treatment of qualified research expenditures (QREs) in an acquisition or disposition of a trade or business.

The taxpayer acquiring the trade or business is to prorate the target’s QREs, gross receipts and related base year impact using the number of days...

It feels so good to be able to give.   To pay it forward to an organization who can assist others in need.  Most of us take the time at the end of the year to take a look at the blessings that we have and make a decision to do something charitable.  It gives you a warm feeling inside to be able to give back.   So you write out that nice donation check and give it to the charity of your choice.   Sometime later you receive a note from the organization you chose thanking you for your donation....

Have you ever traded in your old car for a new car?  If so, you have done a like-kind exchange.  For individuals trading in their personal vehicles, there is no gain or loss on transactions involving personal assets.  However, for businesses, there can be significant tax implications to these transactions. 

A business trading in a fully depreciated vehicle for a new vehicle may defer the gain if they meet certain requirements.  Not only can this be done for vehicles, but for any...

If your generous Uncle George hands you a gift worth $13,000, do you need to let the IRS know about it? Fortunately, no. However, depending on the year the gift was made, the donor might! The rules have changed many times over the years so you need to be aware of what the rules are at the time a gift is made. Fortunately, the gift tax kicks in at high enough levels that very few are affected by it.

What is a gift?

A transfer is a gift if it is between a competent donor and a donee that is capable...

Choosing an entity is just like buying a suit. You can't just choose a one size fits all entity. A legal entity should be specifically tailored to business-size and operational requirements of its owners.  Consider these factors when selecting an entity.

Pick your price

Don't just choose the cheapest entity for your business. Pick the entity that makes sense for your long-term business plan.  Remember you're going to get what you pay for. Quality and complexity comes at a premium.

Liability...

We have recently written blogs discussing the changes in the Repairs and Maintenance rules and regulations.  We have reviewed the changes to the basic rules reviewing what type of expenditures have to be capitalized and looked at the changes to the definition of a Unit of Property (UOP), as it relates specifically to real estate.  In this blog, we will expand the discussion on these changes to cover the General Asset Account (GAA) rules, related election, and the importance of understanding and...