Hot Topics for the Month of May

Click on the link to read more about: How to Avoid Penalties on Your Household Helpers, Employee or Independent Contractor- Which is it?, and Turning Your Vacation into a Tax Deduction. http://www.meckcpaaustin.com/newsletter.php#1

New Tax Rules for 2012

Increased Savings Opportunities

• Due to cost-of-living adjustments, you are allowed to sock away more money into certain retirement plans.

Last licks for low capital gains taxes?

• The historically low rates have been used for taking capital gains and qualified dividends in recent years- 15% (zero for those in the 10% or 15% tax bracket)- are set to expire at the end of 2012. Rates could be higher, even significantly higher starting in 2013 (especially if the additional Medicare tax on investments scheduled for 2013 takes effect)

Good Record-keeping Habits for the New Year

Start the year off right by learning which items you’re required to substantiate with receipts or other records. Then get organized to track these items throughout they year. Suggestions:

• Use a 3- ring binder to file the receipts and acknowledgments for charitable contributions, estimated tax payments, information returns, and other tax-related information you’ll need at tax time.

• Use an expandable file to keep receipts for medical and other deductible costs. Alternatively, scan receipts into your computer (or use an app to scan) to create a permanent record.

• Use apps to track your driving that may be deductible (e.g., for business, medical, moving, or charitable purposes)