This week’s biggest story is continuing gridlock on tax legislation, derailing the extenders law and threatening to block others. (more…)
Archive for June, 2010
Friday Wrapup
Friday, June 25th, 2010Roth Conversions and the Medicare Tax
Thursday, June 24th, 2010This is the fifth in our series on Roth conversions and tax rates. (For earlier ones, click on the “Roth conversion” tag below this entry.) Our focus here is on how the new Medicare tax on investment income may affect planning for a Roth conversion in 2010 — even though the new tax doesn’t take effect until 2013. (more…)
Not Just a Math Trick
Tuesday, June 22nd, 2010Many books on investing explain the rule of 72, which makes it easy to estimate how long it takes for an investment to double at a given rate of growth. In most of these books it’s presented as a bit of trivia or at best a handy math trick. In That Thing Rich People Do I show how it can be used to gain insight into key aspects of investing, including the benefits of getting started early and the importance of minimizing expenses. (more…)
Friday Wrapup
Friday, June 18th, 2010It’s been a busy week in the world of taxes and investing. Here’s a wrapup of happenings in Congress, guidance from the IRS, and what’s going on here at Fairmark.com. (more…)
Power of Attorney Backlog
Thursday, June 17th, 2010Practitioners should anticipate that the IRS will take as long as 15 days to process power of attorney forms, far longer than usual, while the agency grapples with a backlog. A spokesperson indicated the IRS is working through this backlog and expects to return to a more normal timeframe for processing the form within three weeks.
A delay in processing this form translates into a delay in solving taxpayer problems, as the IRS can’t discuss your issues with a tax professional until there’s a power of attorney in the system establishing his or her authority to speak on your behalf.
New Tax Break for Doctors, Nurses
Wednesday, June 16th, 2010An information release from the IRS deals with a tax break aimed at healthcare professionals working in underserved areas. Some of these doctors and nurses obtain student loan relief in exchange for their agreement to work in those areas, and the healthcare reform law provides enhanced tax treatment to those individuals, retroactive to 2009. The text of the release appears below. (more…)
Regs on Suspension of Interest
Wednesday, June 16th, 2010The IRS has updated (PDF) regulations dealing with situations where taxpayers may be ineligible for suspension of interest, or penalties when tax liabilities relate to listed transactions or undisclosed reportable transactions.
Medicare Tax on Investments: First Look
Wednesday, June 16th, 2010Taxation of investments will undergo one of its most significant changes ever in 2013, when the Medicare tax is set to begin applying to investment earnings of higher-income individuals. Although this tax is years away, investors and their advisors need to be planning for it now as it will affect strategic decisions they make this year, including Roth conversions and capital gain realizations. Here’s a first look at the new tax. (more…)
IRS Asks Who’s Responsible
Wednesday, June 16th, 2010New businesses have to file Form SS-4 to obtain an employer identification number, which is used in all the tax filings of that business. Prior practice permitted businesses to use a nominee as the “responsible person” named on line 7 of the form. In a little-noticed change, the IRS is now requiring the true responsible party to be listed.
Failure of the business to withhold and pay over income tax withholding and social security tax can result in personal liability for the responsible person.
Related
- IRS explains requirement
- Form SS-4 (PDF)
- Form SS-4 instructions (PDF)
