Tax Planning

Start of tax season delayed until Jan. 30; later for some taxpayers

The IRS announced on Tuesday that it plans to open the 2013 filing season and begin processing many individual income tax returns on Jan. 30 (IR-2013-2). However, not all taxpayers will be able to start filing tax returns on that date. The IRS says it will be able to begin

Tax and fiscal cliff resources

The Journal of Accountancy is dedicated to ensuring CPAs stay well informed about the tax issues. This page gathers together news stories and articles from AICPA magazines and newsletters discussing the many aspects of the fiscal cliff that loomed at the end of 2012. The fiscal cliff had many different

Year-end tax planning: Preparing for the tax cliff

Rarely has there been such a major difference between the laws in effect in one year and the next. The maximum income tax rates next year could be as high as 43.4% on ordinary income (44.6% if the potential impact of reinstated limitations on itemized deductions is taken into account)

Facing the tax cliff

You can’t pick up a newspaper or go online this fall without seeing stories about the coming “tax cliff” or “taxmageddon”—the time at the end of this year when the current tax rates for income, capital gains, gifts, and estates are scheduled to expire. Mostly overlooked by the news media

Plan now for inside buyouts

Succession planning took a hit in recent years. The financial crisis of 2008 touched off an unnerving chain of events for business owners looking for an exit. Constrained lending diminished the number of able buyers and lowered valuations. Baby Boomers, particularly those close to retirement, were forced to put plans

AICPA urges Congress to quickly fix tax cliff

Congress must reach an agreement on expiring tax provisions as soon as possible because small businesses are being impeded from long-term tax and cash flow planning and prevented from making informed decisions. That is the message Jeffrey Porter, vice chair of the AICPA Tax Executive Committee, delivered to the House

Tax compliance for acquisitions: Prepare before purchasing

Fears of a “double-dip” recession in 2012 may have subsided, but the overall economic forecast remains uncertain. Therefore, companies are looking beyond organic, internal growth to external growth sources to bolster company performance. A recent study by The Boston Consulting Group (BCG) touted the power of acquisitions for growth during

Avoiding missteps in the LIFO conformity rule

During inflationary times, companies can reduce their taxable income by using the last-in, first-out (LIFO) cost flow assumption for inventories. However, the tax savings from using LIFO come at a cost. Under the LIFO conformity rule in Sec. 472(c), if LIFO is used on a taxpayer’s tax return, no other

New portability rules: A cure for incomplete estate planning

Many CPAs are involved in representing estates of decedents who died in 2011 and 2012. In dealing with such estates, it is important to focus on the new Code provisions allowing portability of the decedent’s unused lifetime gift and estate exclusion amount to the surviving spouse. A failure to do

Tax planning for 2013

CPAs have an unprecedented opportunity to demonstrate their value in the following ways before the end of 2012, when the Bush-era tax cuts are set to expire, estate and gift tax exemptions are scheduled to shrink back to $1 million, and current proposals could diminish the planning advantages of grantor

The 10 most powerful postmortem planning pointers for trusts and estates

After a client passes away, there is much more to do than just prepare a final Form 1040, U.S. Individual Income Tax Return. Taking control of the postmortem planning process can be a powerful way to save tax dollars for the decedent’s estate and family. Postmortem planning also applies to

Tax-advantaged investing for an uncertain economy

Investors and their advisers have weathered several years of turmoil, with market conditions often upending conventional investing approaches and related tax strategies. As recently as summer 2010, Federal Reserve Board Chairman Ben Bernanke testified before Congress that the outlook for the U.S. economy remained “unusually uncertain.” Slightly more than a

Prop. regs., rulings facilitate "longevity annuities"

The IRS issued proposed rules (REG-115809-11) that would permit IRA participants to enter into contracts for annuities that begin at an advanced age (often called longevity annuities), using a certain amount of their account balances without having these amounts count for calculating required minimum distributions from the IRAs under Regs.

Tax planning for parents of college students

As parents plan for their children’s higher education, they may choose from an array of tax-favored savings vehicles and deductions and credits. Options include education savings plans, education credits, deduction of educational expenses, education savings bonds, education loans and other alternatives. No single option works best for everyone, but by

When a client leaves or loses a job

Given the continued weakness in the economy and an unemployment rate still above historic norms, now is a good time to review the financial planning issues clients face when they leave a job or are laid off. A CPA’s timely and proactive advice can have a lasting effect. Here are

All in the family

CPAs do their best to keep up to date with tax developments. However, much of their job involves dealing with family dynamics, requiring skills related more to understanding and communication than technical expertise. Three principles should guide practice management when families are involved: - Understand the perspective of each family

New tax provisions for 2012

With the ringing in of the new year, several new tax provisions took effect. While the list of new items does not compare with the number of tax provisions that expired at the end of 2011 (see “Many Tax Provisions Set to Expire at Year-End”), practitioners should be aware of

IRS provides planning opportunity for accrued bonuses

A recently issued revenue ruling (Rev. Rul. 2011-29) provides accrual-method employers with a potential planning opportunity to secure a current deduction for accrued bonuses paid within 2½ months of their tax year-end. This opportunity can apply even though the bonus plan includes a contingency, that is, a requirement that the

Advising Clients in Same-Sex Relationships

Even as the debate over legally recognizing same-sex relationships continues, many such unions are being created in which income, expenses, assets and liabilities are shared, but generally without legal recognition of property and other rights accorded heterosexual marriages, federally and in most states. These unions create unique challenges and opportunities

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Using drones to enhance audits

Hermann Sidhu, CPA, global assurance digital leader at EY, walks us through EY’s exciting new project to use drones to help audit large warehouses and outdoor inventories.