Making the most of 2012 education credits
The American Opportunity credit (up to $2,500 per year per student for qualifying expenses for the first four years of postsecondary education) and the Lifetime Learning credit (up to $2,000 per tax return for postsecondary education expenses beyond the first four years) reduce taxes dollar-for-dollar. Both a credit and a tax-free Section 529 plan or…
10 Easy Ways to Adjust for a Changing Budget
With the expiration of the Social Security payroll tax break, many employees will see a reduction in their paychecks. Employees will want to adjust their budgets now so they don’t run into any unwanted surprises. Below are ten ways to help you find extra money to offset the loss: Adjust your withholding. The IRS has…
IRS makes deducting home office expenses easier
On Jan. 15, the IRS announced a new simplified home office deduction, which is available beginning with 2013 income tax returns (not the 2012 returns generally due April 15, 2013). Normally, if your home office qualifies, you can deduct a portion of your mortgage interest, property taxes, insurance, utilities and certain other expenses. Further, you…
IRS Issues Revenue Procedure on Inflation-Adjusted Items
Late last week, the IRS issued Rev. Proc. 2013-15, which contains information on inflation-adjusted items for 2013. When the IRS issued its usual end-of-the-year inflation adjustment revenue procedure back in October, it noted that a majority of the items normally included would depend on how Congress approached the fiscal cliff legislation. Below you will find…
Newly revived “charitable IRA rollovers”: Time is running out for 2012 tax savings
The American Taxpayer Relief Act of 2012 (ATRA) revives for 2012 and 2013 the opportunity to make tax-free IRA distributions (up to $100,000 per year) for charitable purposes. If you’re age 70½ or older, you can make a direct contribution from your IRA to a qualified charitable organization without owing any income tax on the…
IRS Forms that 1040 Filers Can Begin Filing in Late February or March
Below is a list of forms that will be accepted by the IRS in late February or March after updating forms and completing programming and testing of its processing systems. A specific date will be announced in the future. Please contact your Lewis & Knopf tax professional at 810-238-4617 if you have any questions. Form…
New Developments in Michigan Personal Income Taxes
New developments will affect many Michigan residents’ personal income taxes this year. The Michigan Department of Treasury recently issued a release that highlights some of these developments, including information on forms that have been added and discontinued for tax year 2012, as well as certain credit, deduction and exemption amount adjustments. Below are some of…
What 2013 tax law changes mean for tax withholding
The IRS has updated income-tax withholding tables for 2013 in light of the American Taxpayer Relief Act of 2012, signed into law Jan. 2. Also, because the payroll tax holiday hasn’t been extended, employers must withhold Social Security tax at the rate of 6.2% rather than at the 4.2% rate that applied in 2011 and…