Recently added articles from The Kiplinger Tax Letter:
Dear client.
Sep 19, 2008 ... Dear Client: With Election Day about six weeks away ... McCain and Obama are sparring on taxes, battling over which of them would give bigger cuts to filers. We've sorted through the campaign rhetoric and compared the plans to see who comes out ahead. Most filers ...
Dear client.
Sep 05, 2008 ... Congress has plenty of tax work left to do as lawmakers return from their long summer break. A bill reviving lapsed tax breaks tops the list. Unless taxwriters act in the next few weeks ... Popular write-offs will not be on the forms. They include the tax deductions for state ...
The 1040 for 2008 will sport a special line for the new property tax write-off for filers who don't itemize.(REAL ESTATE)
Sep 05, 2008 ... The 1040 for 2008 will sport a special line for the new property tax write-off for filers who don't itemize. This break is on top of the standard deduction and is capped at $1,000 for married couples and $500 for single filers. Nonitemizers ...
IRS provides some flexibility on penalty free IRA distributions before 59 1/2.(RETIREMENT PLANS)
Sep 05, 2008 ... IRS provides some flexibility on penalty free IRA distributions before 59 1/2. A makeup payout due to a broker's mistake won't trigger the 10% penalty, IRS says privately. Usually, payouts before 59 1/2 are penalized unless the IRA owner takes a series of substantially equal annual ...
U.S. residents cannot make tax free rollovers of U.K. pension plans to IRAs or company plans based in the States, the Revenue Service privately rules.(RETIRMENT PLANS)
Sep 05, 2008 ... U.S. residents cannot make tax free rollovers of U.K. pension plans to IRAs or company plans based in the States, the Revenue Service privately rules. Although language in the U.S.-U.K. tax treaty appears to permit tax free transfers, that is ...
Courts will strictly construe an estate tax break for victims of terrorism.(ESTATE TAXES)
Sep 05, 2008 ... Courts will strictly construe an estate tax break for victims of terrorism. Only those who are directly affected by an attack will qualify for the relief, according to a district court. After her husband was killed in the Sept. 11 attacks, the surviving spouse became very depressed and ...
Firms get more time to switch to debit cards to pay commuting benefits.(BENEFIT PLANS)
Sep 05, 2008 ... Firms get more time to switch to debit cards to pay commuting benefits. Earlier, IRS had said that beginning Jan. 1, 2009, employers in localities with transit card systems would no longer be allowed to pay the benefits in cash. Now the Service says many local transit systems need more ...
Lack of ability to pay isn't a defense for failing to send payroll taxes to IRS, an Appeals Court says.(TAX DEBTS)
Sep 05, 2008 ... Lack of ability to pay isn't a defense for failing to send payroll taxes to IRS, an Appeals Court says. It affirms a conviction of a nursing home operator who used taxes withheld from employees to ...
Can the IRS get at an LLC's assets for a tax debt owed by its sole owner?(TAX DEBTS)
Sep 05, 2008 ... Can the IRS get at an LLC's assets for a tax debt owed by its sole owner? The agency thinks so, even if state law says creditors can't attach assets of a limited liability company to satisfy the debts of its owner. In a private ruling that's ...
IRS is planning a crackdown on banks that hold tax-exempt bonds.(BUSINESS TAXES)
Sep 05, 2008 ... IRS is planning a crackdown on banks that hold tax-exempt bonds. The tightening involves municipals bought by a bank's subsidiary. Last year, the Tax Court said that munis purchased by the subsidiary do not count as tax exempts held by the bank, and thus do not reduce the amount ...
Bioethanol facilities may be eligible for six-year depreciation after all.(BUSINESS TAXES)
Sep 05, 2008 ... Bioethanol facilities may be eligible for six-year depreciation after all. IRS has withdrawn a private ruling that required eight-year write-offs for such plants if accelerated depreciation was taken. Biofuels producers insisted ...
Amounts paid to get out of an onerous lease are deductible, a court says.(BUSINESS TAXES)
Sep 05, 2008 ... Amounts paid to get out of an onerous lease are deductible, a court says. Under the lease, if the corporate tenant didn't purchase the property after 10 years, the rent would jump to more than three times the fair market rent. So the tenant exercised the option in the lease to ...
There's a rub on expensing for calendar year partners and S firm owners.(BUSINESS TAXES)(Calendar)
Sep 05, 2008 ... There's a rub on expensing for calendar year partners and S firm owners. They may not get full benefit from the $250,000 expensing limit for 2008, according to new IRS guidance. Take this example: In August of 2008, an S firm with a July to June fiscal year puts a $250,000 asset in ...
Restitution paid in a criminal case is deductible for tax purposes.(BUSINESS TAXES)
Sep 05, 2008 ... Restitution paid in a criminal case is deductible for tax purposes, the IRS privately says in the case of a doctor who went to jail for insurance fraud. He also had to use his own funds to reimburse the insurers for his ill-gotten gains ....
A man who didn't father his girlfriend's kids can't take them as dependents if he has not adopted them, the Tax Court says.(DEPENDENTS)
Sep 05, 2008 ... A man who didn't father his girlfriend's kids can't take them as dependents if he has not adopted them, the Tax Court says. The kids are not treated as his qualifying children because they aren't related to him, and they aren't eligible to be ...
A child of divorced parents can be a dependent of both for limited purposes, the Service says.(DEPENDENTS)
Sep 05, 2008 ... A child of divorced parents can be a dependent of both for limited purposes, the Service says. If a noncustodial parent wants to claim the child as a dependent for health savings account purposes, he can do so, even though the custodial parent ...
More on filing refund claims on sales of demutualized insurers' stock.(CAPITAL GAINS)
Sep 05, 2008 ... More on filing refund claims on sales of demutualized insurers' stock: In our Aug. 22 Tax Letter, we recommended filing a protective refund claim if you sold stock of an insurer that demutualized, now that a federal court has ruled against IRS' position that the stock has a zero tax basis ....
IRS interest rates are rising by a percentage point after Sept. 30, 2008. On overdue taxes.(INTEREST RATES)
Sep 05, 2008 ... IRS interest rates are rising by a percentage point after Sept. 30, 2008. On overdue taxes, the Revenue Service will charge 6%. For corporations that owe the agency more than $100,000 in back ...
If you're thinking of buying a hybrid to lower your bills at the pump ...(ENERGY)
Sep 05, 2008 ... If you're thinking of buying a hybrid to lower your bills at the pump ... Some makes no longer qualify for the credit because the hybrid credit law requires the break to be phased out after a manufacturer has sold 60,000 hybrids. Credits will dry up for Hondas after this year. Originally, ...
Hybrids aren't the only vehicles that are eligible for an income tax credit. Advanced lean-burn diesel vehicles qualify as well.(ENERGY)
Sep 05, 2008 ... Hybrids aren't the only vehicles that are eligible for an income tax credit. Advanced lean-burn diesel vehicles qualify as well, according to the IRS. Two 2009 Volkswagen models, the Jetta and SportWagen, carry a $1,300 tax credit ....