Subscribe to "It's Taxing"
“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.
Tucked into the recent “Fiscal Cliff” bill (the American Taxpayer Relief Act of 2012) was a provision allowing an individual to convert amounts in their 401(k) plans to a Roth 401(k). Previously, an individual could only convert amounts that were otherwise available to withdrawal from their 401(k), meaning after leaving their job, retiring, or reaching age 59 ½. Under the new rules, as long as Roth contributions are offered by the employer’s 401(k) plan, employees can convert amounts while still employed, and at any age.
In 2011, a ruling in the Maryland court system had very interesting implications for many resident taxpayers with out-of-state sourced taxable income.
The court case: Brian and Karen Wynne, et al v. Comptroller of Treasury.
In court the Wynne’s argued that it is unconstitutional for the state of Maryland to disallow a tax credit for taxes paid to another state against the income taxes paid to a Maryland county.
The IRS has issued a clarification to IRS Notice 2013-8 as to the reporting of the 2012 retroactive adjustment to the tax-free exclusion of transit passes and transportation in a commuter highway vehicle on the 2012 fourth quarter Form 941.
The IRS has issued Notice 2013-8, which provides employers guidance on how to deal with the retroactive (part of the American Taxpayer Relief Act of 2012 passed 1/1/13) increase in the maximum monthly exclusion afforded employees from $125 to $240 for 2012. The increased exclusion is applicable to employer-provided transit passes and commuter highway vehicle (vanpooling) transportation benefits and puts them on par with the exclusion for qualified parking for tax year 2012 and 2013. Such benefits are excluded under Section 132(f)(2)(A) of the Internal Revenue Code.
The IRS has issued Rev. Proc 2013-13 which promises a much simpler way to claim the home office deduction. Beginning in 2013, a user of a qualified home office can elect to claim an expense of $5 per square foot of office space, up to 300 square feet total, instead of calculating the actual expenses. This $5 amount takes the place of utilities, cleaning, repairs, depreciation and any other expenses related to business use of the home deducted against the business income. Mortgage interest, property taxes and casualty losses are still allowed as itemized deductions on Schedule A, but are not allocated against business income. Other non-home office related business expenses are also still allowed and are unaffected by this election.
You may have new reporting responsibilities when filing your W-2’s this month. Employers sponsoring group coverage will have new reporting responsibilities according to the Affordable Care Act and the Internal Revenue Service. You may need to report costs associated with employer-sponsored health coverage on IRS Form W-2.
With Maryland being the latest state to recognize same-sex marriages and the tax filing season inching ever closer, same-sex couples should be aware of their rights and obligations when properly filing their tax returns. Since the laws and requirements are different for each taxing jurisdiction: Federal, Maryland, Virginia, and the District, this article will be broken up into four parts.
By now it is no secret; we have been saved from tumbling off the ‘Fiscal Cliff’ after Congress and the President passed the American Taxpayer Relief Act of 2012. Granted, the legislation came right down to the wire before an affirmative vote. We are now entering a time of increased certainty with respect to U.S. transfer taxes (estate, gift, generation-skipping transfer, etc.).