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Tax Blog
“Taxing” is a word synonymous with “onerous” and “wearing.”  Bond Beebe, Accountants & Advisors, have created a user friendly blog called “It’s Taxing” to inform and educate our clients and business associates on timely topics related to tax, estates, accounting and finance.  We hope our blog answers your questions and alleviates the heavy burden and anxiety related to understanding complicated tax laws and related matters. 

 

Final Comprehensive Repair/Capitalization Regulations Take Effect: Theory Becomes Practice

New-Tools-for-Business-OwnersThe IRS released the much anticipated “repair and maintenance” regulations for Sections 162(a) and 263(a) in September of last year, providing guidance regarding the deduction and capitalization of costs related to tangible property. The final regulations replace the temporary regulations issued in 2011.

Much was written about these changes when they first came out, however, since these regulations will affect virtually everyone who has a business (as most businesses have tangible property) and just took effect at the beginning of 2014, we wanted to remind you of some of the regulation’s highlights.

2014 Expired Tax Provisions

expired-taxes
As of December 31, 2013, a number of tax provisions affecting both individuals and businesses expired. Currently, it is unclear whether Congress will retroactively extend any of the provisions, but the possibility remains. A few of the notable expired provisions are outlined below:

North Carolina Adopts Sales Tax for Service Contracts Effective January 1, 2014

service-contractIn July of 2013, North Carolina adopted N.C. Gen. Stat. § 105-164.4(a)(11), which imposes the 4.75% general State and applicable local and transit rates of sales and use tax “to the sales price of a service contract” sold by a retailer on or after January 1, 2014 and sourced to this State.

2013 Year-End Tax Planning: Power of Attorney Radio Show

2013-year-end-tax-planningAs I mentioned previously on the blog, I had the pleasure of joining Wayne Zell of Odin Feldman Pittleman on his radio show, Power of Attorney. We discussed a number of tax changes for 2013 and I shared several strategies to help deal with those changes and increases.

You can listen to the entire podcast here, but here are the basics:

IRS Announces 2014 Standard Mileage Rates

irs-2014-mileage-rateThe IRS announced the 2014 optional standard mileage rates this week. They are as follows:

  • 56 cents per mile for business mileage
  • 23.5 cents per mile for medical or moving mileage
  • 14 cents per mile for charitable service mileage

For those keeping track, the rates for business, medical, and moving mileage each decreased by one-half cent from their respective 2013 rates. The charitable mileage rate remains unchanged.

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Year-End Tax Planning - Power of Attorney Radio Show

There are a number of new tax issues to take into account as you do your year-end tax planning. Wayne Zell of law firm Odin, Feldman Pittleman asked me to join him for a session of the Power of Attorney radio show to talk about the planning opportunities taxpayers can take advantage of before year-end.

The interview will air tomorrow (Saturday, 12/7) at 10AM on Federal News Radio (1500AM). We’ll discuss the new net investment income tax, as well as several exemption and deduction phase-outs, and the new effective tax rates for higher income levels. I’ll also offer strategies for increasing or making retirement plan contributions, harvesting capital losses, and other important year-end strategies.

For more information about tomorrow’s interview, and the Power of Attorney show, click here. Hope you can join us at 10AM tomorrow!

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Looking for more tax updates?  Follow us on Twitter, connect to Bond Beebe on LinkedIn, be our Facebook friend, connect with us on Google+, visit our Scoop.It Magazine, or watch a video on our YouTube Channel.

Getting Active: Active vs. Passive Income and the NIIT

irs bdgIn our previous post, we outlined the basics for those individuals who are subject to the 3.8% Net Investment Income Tax (NIIT) for 2013. In summary, portfolio and passive income are two categories of income subject to the NIIT. It would then seem intuitive that to avoid this additional surtax of 3.8% on net investment income, you would simply need to have income derived from a business, since income derived from a business is neither passive nor portfolio. Unfortunately, there is a key phrase in the Internal Revenue Code which states that income must be earned in an “active” trade or business in order not to be subject to the additional surtax.

2013 Net Investment Income Tax for Individuals, Trusts and Estates

In addition to the various tax increases enacted on January 1st of this year as part of the American Taxpayer Relief Act of 2012 (which averted the so-Net Investment Income Taxcalled fiscal cliff), taxpayers should note one other tax change for 2013: the 3.8% tax on net investment income. While it was actually put in place way back in 2010 as part of the health-care law, it went into effect for this year and will apply to individual returns due April 15, 2014. 

Specifically, this is a 3.8% tax on the lesser of a taxpayer’s net investment income for the year or the excess of his/her modified adjusted gross income (AGI) at the following thresholds:

  • Over $250,000 for taxpayers filing a joint return;
  • $125,000 for married taxpayers filing separate returns;
  • $200,000 for all other taxpayers.

If your adjusted gross income does not exceed those limits, the net investment income tax will not apply to you.

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