We DO KNOW

According to Warren Buffet “All of America is waiting for Congress to offer a realistic and concrete plan for getting back to a fiscally sound path. Nothing less is acceptable.”  We also know most people would agree with this statement. But, there is no agreement as to how to get this done. We do suspect, whatever happens will create tax mayhem!

We DO KNOW

Based on a letter from Steven T Miller, Acting Commissioner of the IRS, to The Honorable Sander M Levin, Ranking Member of the Committee on Ways and Means dated 11/13/2012 that “if there is no Alternative Minimum Tax (AMT) patch enacted by the end of the year the IRS would be forced to operate the 2013 tax filing season based on the expiration of the [previous] AMT patch. There would be serious repercussions for taxpayers.” He went on to say that if no patch is enacted about 28 million taxpayers would face a very large 2012 unexpected tax liability. His letter can be viewed at http://democrats.waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/Final_Response_Levin_37392.pdf

We DON’T know (and it’s a lot!)

1. If the phase outs for personal exemptions and itemized deductions will be eliminated
2. If the election to deduct state and local sales taxes instead of state income taxes will return
3. If the AMT will be eliminated or if the exemption will be increased for 2012 and 2013
4. If lower long term capital gains tax rates will be extended
5. If the favorable qualified dividends treatment will be extended
6. If the surtax on investment income (if your Modified Adjusted Gross Income exceeds $200,000 for single taxpayers and $250,000 for married couples filing jointly) will be repealed
7. If the mortgage interest deduction will be diminished for certain taxpayers

Good news – WE DO KNOW(and it’s better than nothing!)

The IRS issued the 2013 mileage rates: Business rate is  56.5 cents/mile (up from 55.5cents/mile for 2012); Medical and moving rate is 24.0cents/ per mile (up from the 23cents/mile for 2012)

Because of all of the uncertainty it is more important than ever to be prepared to make some last minute transactions before the year ends. Stay Tuned!

As of last week, all 2011 Tax Organizer Packets were mailed. If you have not received one, and do not receive one in the next week or so, you can either contact our office at (203) 245-0309 or download the forms off of our website by clicking on the following link: 2011 Tax Organizer.

Inside of your packet you will see a 2011 Tax Organizer Envelope, like last year except [Read more...]

For the Individual:

• Charitable contributions are deductible! Did you know that you are able to donate securities that have appreciated and take the full amount of the deduction without paying taxes on the gain? We advise that if you have securities, though, that have decreased in value to sell them first and [Read more...]

If you need our assistance in determining how much to pay this quarter, please call the office at 203-245-0309 to discuss or to schedule a time to come in and review your books ASAP.

I have attached blank vouchers for both the IRS and the State if you need them. If you have any trouble opening the attached documents please let me know.

Third Quarter Federal Estimated Tax Voucher.pdf

Third Quarter State of Connecticut Estimated Tax Voucher.pdf

Make check for the Federal Tax payment payable to the United States Treasury and mail to:

Internal Revenue Service
P.O. Box 970006
St. Louis, MO 63197-0006

Make check for Connecticut  State Tax payment payable to Commissioner of Revenue Services and mail to:

Department of Revenue Services
P.O. Box 5053
Hartford, CT 06102-5053

Be sure to write your Social Security or Tax I.D. # and 2011 Form 1040ES on your checks

At Mary Jo Walker, EA we do not want to extend the filing of 2010 extended returns nor do we want to encourage later payments of the Sept 15 estimated tax payment date unless it is absolutely necessary. However, there are options: This is recent news from the IRS and State of CT DRS relating to tax filings and Hurricane Irene:

The President has declared the following counties a federal disaster area: Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland and Windham. Individuals who reside or have a business in these counties may qualify for tax relief.
The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 27, and on or before Oct. 31, have been postponed to Oct. 31, 2011. This includes corporations and other businesses that previously obtained an extension until Sept. 15 to file their 2010 returns, and individuals and businesses that received a similar extension until Oct. 17. It also includes the estimated tax payment for the third quarter, normally due Sept. 15.

Following the Presidential Disaster Declaration for Connecticut and filing and tax payment extensions announced by the Internal Revenue Services (IRS), the Connecticut Department of Revenue Services (DRS) announced additional state extensions that mirror certain federal extensions.