The IRS has clarified that it will allow self employed taxpayers to deduct their payments to the SSA for medicare premiums once they are enrolled in medicare. In the past the IRS had disallowed this deduction, but it has now reversed that decision, ruling that Medicare is a government insurance program that is eligible for the deduction. This will primarily benefit those over 65 who have income on a schedule C from self employment, though the article does explain how a S Corp shareholder could gain the deduction if they are willing to jump through all the right hoops.
Article.
When you get down to the wire, do you extend your return or file and then amend later with the additional details? This can be a touch choice, especially if you are expecting a large refund and your hands are tied while you wait on a K-1 or a social security number to come in the mail. The odds say it is better to extend according to this article if you can live without the refund funds for a little while.
|
If you work from home and use your car from business then you will want to know the rules on deducting mileage. In order to qualify, your home must meet the home office limitations (whether you claim the home office or not). That means you must have an area of the home that is exclusively and regularly used as the principal place of business. If that is the case, then all the mileage you conduct for business will be deductible. Otherwise, it is considered commuting and only trips between clients would be deductible. For more details see this helpful website.
|
For those who work from their home, here are some good pointers in deducting the mileage from your home to the various points of business that you will need to go to (Post Office, Supplies, Clients, Bank, etc.).
Your home must be regularly and exclusively used as the principal place of business. This can be met if you use it regularly for admin or management activities like bookkeeping and you don't have another fixed location that is set aside for those activities. Be sure that a room or at least portion of a room is used just for these business purposes (i.e. your kitchen table won't qualify).
|
In a compromise that will defer but not solve the problem, Congress has decided that two more months of payroll tax cuts will be given. A little tax savings is better than nothing.
With any tax law change, there are caveats and unintended consequences. One of those is that they don't want those in higher earning brackets to save more than 2/12's of their annual FICA savings by taking all their income in the first few months. To resolve that they have also added a recapture tax to the payroll system.
|
Like last year, the Emancipation day celebrations in Washington DC will delay the filing day to April 17th. This will give procrastinators 2 extra days to take care of their annual tax filing!
|
For 2012 the IRS has published the following chart that shows when you can expect your refund if you efile and direct deposit your refunds:
Basically if you send in your return by Wednesday, it will be available the following Wednesday. (Interesting since last year Friday was the key day for deposits). Note that this is if all goes smoothly and your return doesn't have any processing issues or flags for review and your banking institution doesn't have any processing delays.
|