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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. 


Estate Planning and the Basics of Portability

estate planningThe estate tax landscape has a ‘permanent’ playing field now; the current Federal legislation exists in such a way that the rules will remain consistent for the foreseeable future. Back in 2010, estate tax was in a period of uncertainty due to the expiration of the Bush-era tax rules. Then the American Taxpayer Relief Act of 2012 created permanent estate and gift transfer tax laws, thereby providing a standard, predictable set of rules for estate planning.

The American Taxpayer Relief Act made the federal estate tax exemption permanent at $5 million, indexed for inflation, which now stands at $5,340,000 for individuals who pass in 2014. A federally-taxable estate is one above the current exemption where the decedent’s gross assets exceed allowable deductions, including those assets transferring to the surviving spouse. In other words, a decedent’s estate would not pay estate tax (40%) until the estate’s net assets exceeded $5,340,000.

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

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!

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.

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