It is time again to be thinking of income taxes. IRS in its continuing effort to close the tax gap (the gap between income tax paid and the income tax that ought to be paid, estimated to be over $300 billion) is requiring increased documentation on capital gains (and a new Form 8949) and stepping up audits on capital gains. Congress has also stiffened reporting requirements and penalties on foreign held assets. Because the penalties are so high ($10,000 minimum for inadvertent misreporting; $100,000 or half the balance of the account, whichever is greater, for intentional misreporting), I cannot prepare your tax return if you hold any assets outside of the United States.
On the positive side, conversions from traditional retirement plans to Roth IRAs are no longer limited by income and taxpayers with gross income less than $57,000 and access to the internet are eligible for free tax preparation and filing.
IRS requires mileage logs for vehicles with business use; standard mileage rates for 2011:
Jan 1 to June 30 July 1 to Dec 31 Iowa
Business: 51¢/mi. 55.5¢/mi. “
Medical & moving: 19¢/mi. 23.5¢/mi. “
Charitable 14¢/mi. 14¢/mi. 39¢/mi.
You are required to send a Form 1099 to any individual, partnership or LLC that you paid $600.00 or more for services, rent or interest. Payments to cooperatives, banks and other corporate entities are excluded. Wages in excess of $150 in any quarter require the filing of Forms W-2 and W-3. If you would like us to prepare these forms, you will need to provide us with the information before January 27, 2012.
If you have questions on any of the above or other tax matters feel free to call, e-mail, or stop in. When you have your records ready you may let us know and we will set up an appointment that is convenient for you. Evening or Saturday appointments can be arranged.
Pursuant to U.S. Treasury Regulations, you are hereby advised that any federal tax advice included in this communication is not intended or written to be used, and cannot be used, to avoid any U.S. federal tax penalties or to promote, market, or recommend to another party any transaction or matter. For further information, see IRS Circular 230.
