We recently received the following news from the Massachusetts Society of Certified Public Accountants;
“The Society received word from some members whose clients have received notices from the IRS regarding income not properly reported. This income is linked to Roth IRA conversions from 2010. These notices were sent despite the fact that the income had been properly reported. Anyone with clients reporting a similar situation should resend Form 8606 for the year in question, stating that the income was reported correctly and in compliance with applicable rules. We will keep you updated on any further developments.”
As always, if you receive a tax notice from one of the governing authorities please forward it to our office so that we can assist you.
Congress passed an extension of the 2% payroll tax cut that had been scheduled to expire at the end of February. The extension means 160 million working Americans will continue to pay social security tax on their wages at a 4.2% rate for the rest of 2012, rather than at a 6.2% rate.
Because Republicans and Democrats were unable to agree on how to pay for the extended tax cut, the law included no spending cuts to offset the estimated $93 billion cost of this provision.
The law also provides for long-term federal unemployment benefits, setting the maximum at 73 weeks in states with the worst unemployment and 63 weeks for other states.
Another provision in the law includes the so-called “doc fix” that prevents a scheduled 27% reduction in Medicare payments to doctors.
The unemployment benefits and doctor payments will be paid for by government sales of broadband spectrum, requiring federal workers hired after this year to contribute more to their pensions, and cuts in certain health programs.
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Posted in Latest Tax Developments, Tax Code, Tax Legislation, Tax Planning and Preparation | 
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Post by
Dave Lorenzi CPA
Senator Tom Coburn, R-Oklahoma, is proposing budget cuts that would reduce spending by $9 trillion over the next 10 years. Admittedly, this plan has little chance of coming to fruition. But what are interesting ideas for certain tax cuts do seem to be gaining steam with law makers. Under the Senator’s plan, tax rates would remain the same as they are today, but many deductions would be eliminated, easing taxpayer’s into higher brackets. Although some of his cuts would be in niche areas like eliminating tax breaks for auto race tracks, hockey arenas and Eskimo whaling captains, others will hit home for more of the general public. For instance, he would eliminate the mortgage interest deduction on vacation homes and limit the deduction on homes worth over $500,000. There has been more talk coming out of Washington regarding these sorts of cuts recently. We will keep you posted for how any tax cuts could affect you.
Post by
Maureen C. Conway, CPA, MST
In response to rising gasoline prices, the IRS has raised the standard mileage rate for business use of an automobile from 51 cents per mile to 55½ per mile, effective July 1, 2011 . The medical and moving standard mileage rate is increasing to 23½ per mile, also on July 1, 2011.
The new optional standard mileage rates will apply until superseded by future guidance and can be used by taxpayers to calculate the deductible costs of operating an automobile. Alternatively, taxpayers can instead use their actual costs, but must maintain adequate records and be able to substantiate their expenses.
The standard mileage rate for services to charitable organizations is set by statute at 14 cents per mile and remains unchanged by Thursday’s announcement.
The standard mileage rate for expenses incurred before July 1, 2011 is 51 cents per mile for business use and 19 cents per mileage for medical and moving expenses.
Posted by
David Lorenzi, CPA, Partner
We are pleased to announce that The Paresky, Flitt & Company, LLP, Annual Book Scholarship winners are Grant Schaller, of Natick, MA and Kassandra Santana of Framingham, MA.
Post By
Scott Gallagher, CPA
Greetings and Welcome to my initial blog post on small business software applications. This blog will comment on various topics involving small business software such as Quickbooks Pro and Premier, Peachtree Accounting (although I’ll admit I am partial to Quickbooks over Peachtree for various reasons), Microsoft Office Applications, and more. My name is Scott Gallagher, and I am a Quickbooks Proadvisor and C.P.A. with over 13 years experience in public accounting (the majority of which has been with small businesses).
Examples of more specific topics to be covered in future posts may be subjects like Peachtree vs. Quickbooks, Most Common Errors in Quickbooks, Proper Usage of Quickbooks for Accurate Accrual and Cash Reports, Explanation of specific Microsoft Excel Functions (thousands to choose from, but so few used), as well as topics suggested by readers. I have actually learned the most from others approaching me with questions, so strongly encourage requests from readers for future topics.
Thank you for your interest, and I look forward to your future feedback!