Victoria Majors Jones, CPA - Blog
The Franchise Tax Board (FTB) has announced tax relief for those impacted by the winter storms in California.
The Internal Revenue Service's Office of Chief Counsel on Friday said that self-employed taxpayers can deduct Medicare premiums in the same way they can deduct health insurance premiums. The letter clarifies a little-noticed change in the IRS position on this. The 2010 Form 1040 instructions and Publication 535 started permitting self-employed taxpayers to take the deduction, but at that time the IRS offered no guidance on the change. The chief counsel's letter states that eligible taxpayers can go back and deduct Medicare premiums for tax years that are still open. (Source Journal Of Accountancy-July, 2012)
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On May 31, 2012 the AICPA told Congress that "The uncertainty of the tax law impedes proper estate planning for taxpayers, and the necessity to revise estate planning documents multiple times places an undue burden on taxpayers and their advisors. In addition, if no Congressional action is taken, on January 1, 2013, the 2001 legislation will sunset, which will create turmoil for gifts to multigenerational trusts to which GST exemption was allocated between 2001 and 2012".
I agree with the AICPA. With such uncertainty in the estate and gift tax law, it is impossible to help clients with any sort of tax planning in this area. Hopefully Congress will pass a law by the end of 2012 or sooner.
As part of its “Fresh Start” initiative, the IRS announced today penalty relief for unemployed taxpayers and an expanded installment agreement program. (IR-2012-31)
The penalty relief portion of the program applies to the failure-to-pay penalty and is available to two taxpayer classes (and is subject to AGI limits):
- Taxpayers who have been unemployed for any period of 30 consecutive days or longer at any time in 2011 (or in 2012 up to April 17); and
- Self-employed individuals who experienced a reduction of 25% or greater in their business income in 2011 relative to 2010.
To obtain penalty relief, a taxpayer must do three things:
- File the return by April 17, 2012, or obtain an extension and file by October 15, 2012;
- File Form 1127-A by April 17, 2012, regardless of whether the return is extended; and
- Pay taxes due by October 15, 2012..
In addition, the IRS has broadened installment agreements by raising the threshold for simple installment agreements from $25,000 to $50,000.
Here is a video explaining more about the program.