The Shutdown and What That Means For You

And a Few Things You Should Know Relating to Your Taxes: 

  • You can file your tax return electronically or on paper –– although the processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them.
  • Tax refunds will not be issued until normal government operations resume.
  • For taxpayers seeking assistance, only the automated applications on the regular 800-829-1040 telephone line will remain open.
  • All other tax deadlines remain in effect, including those covering individuals, corporations, partnerships and employers. The regular payroll tax deadlines remain in effect as well.
  • While the government is closed, people with appointments related to examinations (audits), collection, Appeals or Taxpayer Advocate cases should assume their meetings are cancelled. IRS personnel will reschedule those meetings at a later date. 
  • No live telephone customer service assistance will be available, however most automated toll-free telephone applications will remain operational. IRS walk-in taxpayer assistance centers will be closed.

The Federal Government might be “shutdown” and IRS employees are on furlough, but deadlines remain in effect and extensions are due on October 15. Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to […]

Planning for the new Medicare taxes in 2013

As summer quickly passes and we head into the last half of 2013, it is a good time to evaluate your income and deductions for the year and begin working with your CPA on planning strategies to reduce your overall tax burden.

Specifically, upper income individuals should be aware of the additional Medicare Tax which applies to earned income  (wages and self-employment income).  Prior to this new tax provision beginning in 2013, any wages paid to you by your employer were subject to a 2.9% Medicare payroll tax, which was split equally by you and your employer (1.45% each).  Beginning in 2013, wages above $200,000 for individual tax filers, or $250,000 for married taxpayers filing jointly, will be subject to an additional .9% Medicare tax.  
For illustrative purposes, this would mean that if you and your spouse file a joint tax return and have combined wages of $350,000, you will end up paying an additional $900 in Medicare taxes. Employers are required to withhold this additional tax for employees with wages in excess of $200,000, and any underpaid or overpaid Medicare taxes will be adjusted for on your income tax return.  Individuals with both wages and self-employment income aggregate their earned […]

Beware of the 3.8% Medicare Surtax for Estates and Trusts

Ever since the United States Supreme Court upheld the Affordable Care Act, most of the focus has been on how this increased tax effects individual taxpayers.  As determined by this decision, individual taxpayers with modified adjusted gross income over $200,000 (or $250,000 for married taxpayers) are subject to an increased 3.8%  Medicare surtax on certain investment income beginning in 2013.


Little focus has been given on how this increased Medicare surtax will increase tax liabilities for trusts and estates.  Income in an irrevocable trust is either taxed to the trust or to the trust beneficiaries.  If income in the trust or estate is accumulated at the trust or estate level, then the trust or estate pays the income tax.  If the income is distributed to the beneficiaries, however, the trust receives an income tax deduction for the amount of the distributable net income (DNI) and the beneficiaries report the taxable income. 


In the case of a trust or estate, the 3.8% Medicare surcharge is imposed on the lesser of either undistributed net investment income or the excess of adjusted gross income over the highest estate or trust income tax bracket.  For 2013, the highest trust income tax bracket begins at $11,950, […]

Tax Time: What You Need to Know



Every year the tax codes change and last year was no different. The real questions, as we close in on April 15th, are: What are the significant changes that will have an effect on how I prepare my returns for 2012; and, what planning should I be doing now for the current calendar year.
The biggest news, which we’re hoping our clients have heard about at this point, is the passage of the American Taxpayer Relief Act at the beginning of this year. In addition to changing how the Alternative Minimum Tax is calculated on 2012 taxes, it retained the status quo for a number of temporary tax breaks, extending some retroactively and others into the 2013 tax year. Marginal tax brackets also rose a bit, so even if you made a couple thousand dollars more last year, you’ll probably owe the same percentage as you did last year.

Deductions for 2012
The standard deduction for those who don’t itemize rose by $150 for single filers and $300 for joint filers — to $5,950 if you’re filing solo and $11,900 if you’re filing with your spouse. And the amount you get to deduct for both you and your dependents […]

Top 5 Year-End Corporate Tax Planning Tips

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Tax-Related Changes to Newly Passed California Propositions

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Part 1 of 3: Fiscal Cliff and Tax Planning for Medicare Surtax

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Here is a list of 10 deductions individual taxpayers may overlook


Now that all the 2011 tax deadlines have passed, it is a perfect time to start planning for the next tax season.
Here is a list of 10 deductions individual taxpayers may overlook provided by Bankrate.com:
  1. Additional charitable gifts – everyone knows the donation itself is a deduction, but did you know certain expenses are deductible as well?  For example, you could be reimbursed charitable miles at $0.14 per mile, the cost of any supplies bought for the group, and if a uniform is required, you could deduct the cost of that uniform and its cleaning bills.
  2. Moving expenses – there are many moving expenses you can deduct when you relocate.  For example, even your first relocation after college to start a new job is deductible.
  3. Job hunting costs – costs related to searching for a new job in your current profession can be […]

A letter from the CA-FTB: Form 1099-MISC – is it enough?

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By |October 10th, 2012|1099, CA tax, CPA, federal, income tax, irs, Linkenheimer, payments, tax, withhold|1 Comment

Planning for the Medicare 3.8% Tax- Net Investment Income, Deductions and More



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