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R & V INCOME TAX SERVICES
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Dear Valued Client,
This month's edition provides you with important tax updates and strategies that can save you money. If you have questions regarding any of the articles discussed, please contact this office.
Now is the best time for a mid-year tax consultation. This office can help you with your tax planning needs.
R & V INCOME TAX SERVICES
The State of the Estate Tax Reform
Many clients have been asking about the status of the estate tax. Regrettably, there is nothing new to report on this issue for federal purposes.
(Read More)
Reasonable Compensation is Becoming a Hot Issue
Corporate officers will sometimes attempt to disguise what should be payment for services as distributions of cash, dividends, and loans as a means of avoiding payroll taxes on the income.
(Read More)
2010 is the Last Year for the Lean Burn Vehicle Credit
2010 is the final year during which taxpayers can purchase an advanced lean burn technology vehicle and claim a tax credit for the purchase.
(Read More)
Hiring Family Members in a Family Business
In today’s tough job market, students seeking summer employment, young adults looking for full-time employment, and college graduates looking to begin their careers are finding it difficult to land a job.
(Read More)
Big Break for Adoptive Parents
As part of the Health Care Legislation passed earlier this year, the credit for expenses of adopting a child was increased and made refundable. Prior to this change, the credit was non-refundable and could only be used to reduce the adoptive parent’s tax to zero, with any unused portion of the credit carried over for up to five years and used against future years’ tax.
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Having a Bad Year? You May Qualify for the Earned Income Credit.
Many individuals find themselves earning less during these troubled economic times than in years past. As a result, they may qualify for a credit that they previously were not entitled to because of income limitations.
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Misclassifying Workers Can Be Costly!
With the current economy, and not always knowing what lies ahead, most business owners and executives tend to be financially conservative and preserve the cash of the business.
(Read More)
More Details – Health Insurance Coverage for a Child under Age 27
The Department of Health Services and the Treasury Department have recently released additional guidance and details related to the health insurance coverage for a child under the age of 27. Before the passage of the Affordable Care Act into law, many health plans and issuers could remove adult children from their parents' policies because of their age, whether or not they were a student, or where they lived. Under this new law, plans and issuers that offer dependent coverage will be required to make the coverage available until an adult child reaches the age of 26.
(Read More)
Three New Information Reporting Tools Being Added By the IRS
The IRS has long used information reporting as a tool to enforce compliance with the tax laws. This is done in a variety of ways. Information reporting provides the IRS with the ability to perform vast numbers of compliance checks using their computer system.
(Read More)
Exemption for a Child
Generally, the custodial parent is the one that is entitled to deduct the exemption for a child unless the custodial parent releases the exemption. The release (IRS provides form 8332 for this purpose) must be a written declaration, and it must be unconditional (no strings attached, such as requiring the non-custodial parent to meet support payment obligations). If both parents were to claim the children as dependents, the IRS’s computer matching program is designed to flag both of the parent's returns, and send each a notice requiring substantiation for the claim. The IRS would assess additional tax, as well as penalties and interest, if the facts do not support the parent as the one entitled to the exemption.
Circular 230 Disclosure, United States Treasury regulations effective June 21, 2005 require us to notify you that to the extent of this communication, or any of its attachments, contains or constitutes advice regarding any U.S. Federal tax issue, such advice is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that can be imposed by the Internal Revenue Service.
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R & V INCOME TAX SERVICES
Vanessa Tamariz
Phone: (415) 595-3085
E-mail
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