*
Tax pros - check out my post “The IRS Responds” over at THE TAX PROFESSIONAL.
*
Professor Annette Nellen informs us that “the
fiscal cliff the federal government is facing also affects the states” in “The Fiscal Cliff and the States” at 21st CENTURY TAXATION.
*
As I expected “Special Dividends Surge Fourfold as Tax Increase Looms in U.S.”,
as Thomas Black tells us at BLOOMBERG BUSINESSWEEK.
“From the end of September to mid-November,
59 companies in the Russell 3000 stock index declared a one-time cash payment
to shareholders, up from about 15 in the year-earlier period, according to data
compiled by Bloomberg. More than a dozen said they acted because of a pending
dividend-tax increase.”
*
Joe Kristan’s Monday Tax Round-Up at the ROTH AND COMPANY TAX UPDATE BLOG opens
with disturbing quotes from a TAX ANALYST piece -
“Asked by reporters about the AMT patch,
which has caused anxiety for IRS officials preparing for the coming tax return
filing season, Ways and Means Chair Dave Camp, R-Mich., responded, “I’m hopeful
that we will address AMT by the end of the year.” He added that he doesn’t
think a patch will be passed as stand-alone legislation.”
And -
“Ways and Means
ranking minority member Sander M. Levin, D-Mich., also expects the AMT patch
and the extenders to be included in a larger deal on the fiscal cliff. ‘I think
it’s preferable for everything to be put into a package. They relate to each
other,’ he told Tax Analysts.”
It
is hard for me to keep my promise not to whine about the idiots in Congress.
*
William Perez reminds us of the effects of Congressional procrastination on tax
filings in the past in “Possible Delay to Filing Season Due to Late-Passing Legislation, IRS Warns” at ABOUT.COM.
Sort of a preview of what we could expect (at the very least) in the upcoming
tax filing season.
“In 2007, the IRS scrambled to address the
Tax Relief and Health Care Act of 2006, which extended several lapsed tax
deductions. That legislation was passed both chambers of Congress by December
9, 2006, and was signed by the President on December 20, 2006. For the tax
returns that year (2006), we had to manually "write in" special codes
on Form 1040 and Schedule A to indicate tax breaks that were extended but
weren't printed on the forms.
In 2011, the IRS
delayed accepting certain tax returns until February 14, 2011. The delay was
caused by the Tax Relief Act, which had passed both chambers of Congress by
December 16, 2010, and was signed by the President on December 17, 2010. That
legislation extended some already lapsed tax deductions, notably for the sales
tax deduction, classroom expenses, and the tuition deduction.”
*
Tony Nitti offers “Five Tax Planning Strategies For Minimizing The Additional 3.8% Obamacare Tax On Investment Income” at FORBES.COM.
One
of the strategies is –
“Harvest stock gains, rather than losses,
prior to year-end. Taxpayers have long been trained to sell loss-generating stock
prior to year-end in an effort to offset otherwise taxable capital gains. In
the waning days of 2012, however, you should consider selling appreciated
stock, not only to lock in the soon-to-expire 15% preferential rate currently
afforded long-term capital gains, but to avoid the impending 3.8% Medicare tax
as well.”
Please
remember that, as Tony points out –
“The 3.8% Medicare tax applies only
when your modified adjusted gross income, or MAGI (unless you have foreign
earned income, this will be the same as your adjusted gross income) exceeds
certain thresholds: $200,000 for a single taxpayer, $250,000 for a married
couple filing jointly, and $125,000 for a married couple filing separately.”
*
Paul Neiffer reports “Talk Brewing of Extending the Payroll Tax Cut” at FARM
CPA TODAY.
In
his Tax Round-Up Joe Kristan has a good comment on this possibility (highlight
is mine) –
“It seems unwise to accelerate the demise of
social security by reducing funding, but wisdom
isn’t found much in our political class.”
THE
FINAL WORD
A
recent “tweet” suggested that “20% who
qualify for the EIC don't claim it”.
An interesting statistic ,
considering that (at least) 30% of those who do claim it do so fraudulently.
TTFN
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