News

WASHINGTON — Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing individual income tax returns on Jan. 30.

The announcement means that the vast majority of tax filers — more than 120 million households — should be able to start filing tax returns starting Jan 30.

The IRS estimates that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes.

The opening of the filing season follows passage by Congress of an extensive set of tax changes in ATRA on Jan. 1, 2013, with many affecting tax returns for 2012.

The IRS originally planned to open electronic filing on Jan. 22, 2013.

Who Can File Starting Jan. 30?

The IRS anticipates that the vast majority of all taxpayers can file starting Jan. 30, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.

Who Can’t File Until Later?

The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available on IRS.gov.

Source: qtd. from IR-2013-2, January 8, 2013

“The tax side of the ‘Fiscal Cliff’ has been averted. The U.S. senate overwhelmingly passed legislation to avert the so-called fiscal cliff on January 1, 2013 by a vote of 89 to 8, sending the American Taxpayer Relief Act of 2012 to the House, where it was similarly approved on January 1, 2013 by a vote of 257 to 167.” (CCH, 2013)

Read more by clicking the link below:

Congress Approves Eleventh-Hour Agreement To Avert Fiscal Cliff

The Michigan Legislature recently appropriated funds to support the previously passed Agricultural Disaster Loan Origination Program of 2012. GreenStone Farm Credit Services will begin processing applications filed under this program immediately. There are now disaster relief funds available for the affected Michigan fruit growers.  Please click the link below to read more about what we are and can do for the Michigan fruit growers.

http://www.greenstonefcs.com/newsandmedia/companynews/Pages/Disaster-Relief-Funds-Now-Available-for-Affected-Michigan-Fruit-Producers.aspx

Code Section 4191

Proposed Regulations Section 48-4191-1

Below is an outline of the new medical device excise tax.

Outline of the New Medical Device Excise Tax (2) (2)

Year-end planning is a bigger challenge this year than in past years because, unless Congress acts, tax rates will go up next year, many more individuals will be snared by the alternative minimum tax (AMT), and various deductions and other tax breaks will be unavailable. To be more specific, as a result of expiring Bush-era tax cuts, individuals will face higher tax rates next year on their income, including capital gains and dividends, and estate tax rates will be higher as well. The AMT problem arises because, for 2012, AMT exemptions have dropped and fewer personal credits can be used to offset the AMT. Additionally, a number of tax provisions expired at the end of 2011 or will expire at the end of 2012. Rules that expired at the end of 2011 include, for example, the research credit for businesses, the election to take an itemized deduction for State and local general sales taxes instead of the itemized deduction permitted for State and local income taxes, and the above-the-line deduction for qualified tuition expenses. Rules that will expire at the end of this year include generous bonus depreciation allowances and expensing allowances for business, and expanded tax credits for higher education costs.

These adverse tax consequences are by no means a certainty. Congress could extend the Bush-era tax cuts for some or all taxpayers, retroactively “patch” the AMT for 2012 to increase exemptions and availability of credits, revive some favorable tax rules that have expired, and extend those that are slated to expire at the end of this year. Which actions Congress will take remains to seen and may well depend on the outcome of the elections. While these uncertainties make year-end tax planning more challenging than in prior years, they should not be an excuse for inaction. Indeed, the prospect of higher taxes next year makes it even more important to engage in year-end planning this year. To that end, we have compiled a checklist of actions (see below) that can help you save tax dollars if you act before year-end. Many of these moves may benefit you regardless of what Congress does on the major tax questions of the day. Not all actions will apply in your particular situation, but you will likely benefit from many of them.

We can narrow down the specific actions that you can take once we meet with you to tailor a particular plan. In the meantime, please review the following list and contact us at 231-726-5800 at your earliest convenience so that we can advise you on which tax-saving moves to make. We also should schedule a follow-up for later this year to see whether the November election results will require changes to year-end planning strategies.

Year End Tax Planning for Individuals

Year End Moves for Business Owners

Other Year End Tax Planning Sources

2013 Tax Changes Require Thorough Year-end Tax Planning

Now Is the Time: Converting a C Corporation to an S Corporation or LLC

Current Developments in S Corporations

Recent Developments in Estate Planning: Part I

Recent Developments in Estate Planning: Part II

Fraud is a human problem, to understand it, involves understanding the human elements that it is made up of. Click on this link to take a short quiz to see whether you have what it takes to recognize the warning signs of fraud.

http://www.journalofaccountancy.com/Issues/2012/Aug/20125443.htm

Many Americans have not signed the proper documents to protect their loved ones in the case of an accident. A 2011 Associated Press Survey discovered that 64% of baby boomers did not have a living will. This article below by Deborah Jacobs gives insight into the importance of real estate planning for each life stage. http://www.forbes.com/sites/deborahljacobs/2012/06/26/the-real-estate-planning-crisis-isnt-about-taxes/

Backed by Governor Snyder, the senate is planning on taking on a bill that would make school employees have to pay more for benefits. This bill has already been improved by the House by a a 57-47 vote. To read more, click on the link below.  School employees could see a cut it in benefits as soon as the start of the new school year.  Please click the link below to learn more about the possible cut to school employees benefits.
http://www.freep.com/apps/pbcs.dll/article?AID=2012207150462

In a 5-4 majority, the Supreme Court has upheld the individual mandate in the Patient Protection and Affordable Care Act (Individual Health Care Act). This mandate requires most Americas to have health care. If they do not, they will face a penalty. This mandate would go into effect for tax years ending after December 31, 2013.

For more information: http://www.washingtonpost.com/politics/supreme-court-to-rule-thursday-on-health-care-law/2012/06/28/gJQAarRm8V_story.html

The IRS has released new guidance on the 0.9% additional Medicare tax scheduled to go into effect in 2013. The guidance is in question and answer format and the link is listed below. http://www.irs.gov/businesses/small/article/0,,id=258201,00.html