Archive for July, 2012

IRA minimum distributions in the year of the owner’s death

Wednesday, July 25th, 2012

When an IRA owner dies after required distributions have begun, there is often a required minimum distribution for that year that hasn’t been paid yet. Any required minimum distribution that wasn’t paid to the owner must be paid to the beneficiary. Seymour Goldberg, CPA, discusses how beneficiaries are often unaware of this requirement and are unaware that the distribution cannot be rolled over. He cautions that practitioners need to help clients take timely corrective action to minimize the tax impact.

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What you’ll get in Social Security

Wednesday, July 25th, 2012

Despite what you’ve heard, Social Security isn’t going to disappear.
Many younger people, and even some older ones, are convinced the retirement system’s coffers will run dry before they get a chance to claim benefits. The reality is quite different. Even if Congress does nothing to fix the troubled system, and its trust fund is exhausted in about two decades, Social Security will still collect enough in payroll taxes to pay out 75% of promised benefits at that point.

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Maryland Increases Individual Income Tax Rates and Enacts Other Tax Changes

Thursday, July 19th, 2012

On May 22, 2012, Maryland Governor Martin O’Malley signed legislation enacting the “State and Local Revenue and Financing Act of 2012” that increases the individual income tax rates, establishes new individual income tax brackets, reduces and eliminates personal exemptions for certain taxpayers, increases the tax rate on other tobacco products and cigars, and provides other tax changes.

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IRS 2012 Standard Mileage Rates

Thursday, July 19th, 2012

The Internal Revenue Service issued the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

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Interest on student loans will double in less than a month

Thursday, July 19th, 2012

Clients still paying off student loans will have a new financial calculation to take into account — the interest rate on federally subsidized college loans will double in less than a month unless Congress takes action. The rate will rise to 6.8% from 3.4%. The Congressional Budget Office estimates it will cost the U.S. $6 billion to extend the rate for a year.


Supreme Court’s health care decision affects many tax provisions

Thursday, July 19th, 2012

The Supreme Court’s decision upholding the individual mandate in the health care law had a surprisingly large number of tax ramifications. Because much of the health care law was enacted through the Internal Revenue Code, the court’s decision to let the law stand means that numerous tax provisions will take effect over the next few years. Many of those provisions involve health care, but some, such as the 3.8% tax on net investment income and the codified economic substance doctrine, don’t, and may surprise taxpayers.

 Read More»{Journal of Accountancy}

U.S. housing market begins real recovery

Thursday, July 19th, 2012

The positive news just keeps coming in from the U.S. housing market, with data from the National Association of Realtors showing that pending home sales were up 5.9% in May. That’s the highest pending home sales level since 2010, and the upside is being felt in every U.S. region. This time, it looks like the rise in home sales contracts signed is a natural one too. In March 2010, the last time home contracts were this high, homebuyers were rushing to sign new home deals before the first time homebuyer tax credit expired.

Read More»{Banking My Way}