FOREIGN REPORTING CATCH UP

The IRS has announced new procedures (IR-2012-65) to help some US Citizens residing overseas file their delinquent tax returns and Reports of Foreign Bank and Financial Accounts (FBARs) without being assessed large penalties or other enforcement action.  In addition to tax returns and FBARs the IRS will allow submission of retroactive deferral elections of foreign retirement plans under the new procedures.  All of this is scheduled to go into effect September 1, 2012.

These new procedures specifically target taxpayers who […]

DC (AGAIN!) DELAYS MUNI BOND INCOME TAX

Brian Wynne, CPA

DC has again passed legislation that further delays the taxation of non-DC municipal bond income.  The new legislation ensures that income from all municipal bonds will not be taxable for DC residents in 2012.  Starting in 2013, DC will subject municipal bonds from states other than DC acquired after January 1, 2013 to taxation.  DC will continue to exclude Metropolitan Washington Regional Airport Authority bonds and under federal law Virgin Islands, Guam, Puerto Rico and American Samoa […]

HEALTH FLEXIBLE SPENDING ACCOUNT (HFSA) – ADDITIONAL CHANGES FOR 2013

2013 brings additional changes to HFSAs that are offered by many employers. As you may recall, not long ago these accounts were forced to discontinue reimbursements on a pre-tax basis for medication purchased “over the counter.”

Beginning in 2013, HFSAs will encounter further limitations. Starting next year, the maximum amount allowed as a salary reduction contribution to an individual employee’s HSFA will be $2,500. The IRS recently issued Notice 2012-40 which contains guidance as to how this new contribution limitation […]

TAX INCREASES FOR SOME MARYLAND RESIDENTS

The Maryland Senate (on Tuesday) and the House (on Wednesday) passed a tax increase on individuals reporting income of more than $100,000 and joint filers reporting income of more than $150,000 in Maryland.  The Governor is expected to sign the bill into law soon.

The increase is retroactive to January 1, 2012, and Maryland will issue new withholding tables in the coming weeks.  The increase is a quarter of a percentage point (.25%) in tax on those higher-income earners.  The […]

WILL 2013 BRING TAX CHANGES?

Daniel Bottner, CPA

Next year has the potential to bring big changes for taxpayers.

The Bush-era tax cuts are scheduled to expire on December 31, 2012 and a new Medicare tax will be established.  However, there is great uncertainty as to what will actually happen because of the election in November and (in some economists’ views) the potential adverse economic impact of large tax increases.

Expiring Bush-Era Cuts

The Bush cuts were the product of the Economic and Tax Reconciliation Act of […]

UNDERSTATEMENT OF BASIS IS SUBJECT TO 3 YEAR STATUTE OF LIMITATIONS

The Supreme Court issued a ruling on 4/25/12 that an overstatement of basis is not an omission of gross income for determining the statute of limitations that applies under Code Section 6501(e)(1)(A) (Home Concrete & Supply LLC (109AFTR 2nd 2012-661).
This means that the normal 3 year period  in which the IRS can make tax adjustments  will  apply rather than the special 6 year period the IRS has been using .  This issue has been litigated for several years with […]

0 DC WITHHOLDING REQUIREMENTS ON RETIREMENT DISTRIBUTIONS REVISED

Brian Wynne, CPA

DC passed emergency legislation last Friday, February 24, 2012, mostly repealing the new-for-2011 withholding requirements on retirement distributions to DC residents.  Previously, DC required top-rate (8.95%) withholding on all retirement distributions to DC residents.  Effective immediately, the withholidng requirement is repealedfor periodic and non-lump-sum retirement plan distributions.  The withholding requirement now only applies to lump-sum distributions, but excludes:
 

(1) any portion of a lump-sum payment that was previously subject to tax;

(2) an eligible rollover distribution that is done […]