|
Massachusetts has
initiated a two-month tax amnesty program for almost all Filing Extensions Are Available by Phone or Computer Automatic four-month extensions are available by phone or by computer, as well as through the paper Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. Taxpayers may choose to pay any projected balance due when requesting an extension, and may make this payment electronically. Even without a payment, the taxpayer is required to estimate the total tax liability based on the information available. If the IRS later finds this estimate unreasonable, the extension will be null and void. The IRS has a toll-free phone line for extensions - 1-888-796-1074. Taxpayers using the phone get a confirmation number to signify that the extension request has been accepted, which they should keep for their records. Taxpayers may also e-file an extension request using tax preparation software on their own computer or by going to a tax preparer. Those filing by computer get an acknowledgment that the IRS has received their request. Taxpayers asking for extensions by phone or computer can choose to pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. They will need the appropriate bank routing and account numbers for that account, and must also have the adjusted gross income (AGI) from their 2000 tax return to verify their identity. Another way to
get a filing extension is to charge an extension-related payment to
an American Express, Discover Card, or MasterCard account. Authorized
processors take payments through their phone and Web site systems. There
is no IRS fee for credit card payments, but the processors charge a
convenience fee. Taxpayers may call 1-888-255-8299. The Web site address
is www.1888ALLTAXX.com.
Taxpayers may also charge the taxes due for The IRS noted that
taxpayers who live outside the U.S. and Puerto Rico and whose main place
of work is outside the U.S. and Puerto Rico already have a filing extension
to June 15. This also applies to those in military service
For the year 2002
the standard mileage rate for business mileage was 36.5 cents per mile.
Effective January 1, the rate decreases to 36.0 cents per mile. Charitable
mileage for 2002 and 2003 is 14.0 cents per mile while Qualified Tuition Plans (529 Plans) The rules change dramatically for contributions to a QTP (Qualified Tuition Plan) made after January 1, 2002. Among the general provisions are -
There are many other provisions relating to the change in tax treatment of a QTP. You should not make any decisions based on this summary alone, but should consult a tax professional for your particular circumstances. Refundable Massachusetts Credit ("Circuit Breaker Credit") Beginning January
1, 2001 Massachusetts has a refundable credit for taxpayers 65 years
of age or older having an assessed valuation of their principal residence
of less than $425,000, with total income less than $41,000 if single,
$51,000 head of household, or $61,000 married filing jointly. For 2002
these amounts have been increased to $42,000, $53,000, and $63,000.
The credit is available to renters for whom 25% of their rent actually
paid exceeds 10% of their total income, as well as homeowners for their
principal residence only. The credit cannot exceed $750 in 2001 or $790
in 2002, adjusted for inflation, in subsequent years. The credit is
equal to the amount by 25% of rent actually paid exceeds 10% of the
taxpayers income for renters, or the amount of property taxes actually
paid 2000
Tax Return Not Processed by IRS
The IRS has identified a problem. Some tax returns, payments, and extensions are missing from the IRS Pittsburgh Post Office Box address. This has affected a limited group of taxpayers in New England and upstate New York. To be considered an "affected" taxpayer, one must meet all of the following criteria:
Taxpayers, who sent a payment to the IRS Pittsburgh Post Office address and, after reconciling their June bank statements, have found that the IRS payment has not cleared, should stop payment on the check. A replacement check and any documentation (tax return or extension form) that was sent with the original payment should be sent to the Andover IRS Center Payment Tracer Unit at:
The taxpayer's phone number (or the practitioner's, if a Power of Attorney or checkbox is on file) should be included, so that Andover can confirm receipt of the replacement check and documentation. The IRS Center will send a letter to each affected taxpayer giving further information, including how to be reimbursed for any bank charges incurred. Any taxpayer who is charged a fee by the bank for stopping payment on the check will be reimbursed by the IRS upon filing Form 8546, "Claim for Reimbursement of Bank Charges Incurred Due to Erroneous Service Levy or Misplaced Payment Check."
Incentive Stock Options and the AMT
If you exercised incentive stock
options (ISO's) earlier this year when the market was high and you still
own the shares, you may want to consider the tax implications of selling
those shares now if the stock value has decreased significantly. The reason
for this is the Alternative Minimum Tax (AMT). For an ISO the difference
between market price on the date of exercise and the exercise price is
a preference item for the AMT calculation. This means that even though
for regular tax purposes, you would not have to consider the spread at
the date of exercise, for the AMT calculation the spread is considered
income. If the ISO shares are sold within the tax year that the option
was exercised then the sale is a "disqualifying disposition" and the difference
between the market price on the date of sale and the exercise price becomes
current taxable income. The AMT income is extinguished.
This is a complex calculation because of the other factors that impact
the AMT, such as disallowance of taxes paid deductions, disallowance
of personal exemptions, inclusion of certain types of otherwise excludable
exempt interest income, the phase-out of the AMT exemption and a number
of other factors. You should consult your tax advisor or call our office
for an appointment before acting on this suggestion.
Tisdale Co.'s ESTATE TAX CHECK LIST
An estate tax return must be filed
and paid within nine months of the date of death. Failure to file and
pay on time will result in significant penalties for late filing and late
payment. If additional time is needed for payment of the tax because of
the need to liquidate assets arrangement can be made with the taxing authorities.
Because of the legal nature of estate tax laws Tisdale Company will
use the services of a tax attorney in preparing estate tax returns.
For the printable Tisdale Co. Estate Tax Check List:
- Copyright © 2000 Tisdale Co. IRS HOTLINE Call the IRS Taxpayer Advocate
Services toll-free number at 1-877-777-4778, 24 hours a day, seven days
a week. This special IRS hotline offers help on tax problems that can't
seem to be solved through normal channels.
TAXES - IRA'S CAPITAL GAINS, ETC.
DEDUCTING IRA CONTRIBUTIONS
Higher income limits for deducting IRA contributions apply to workers
covered by an employer retirement plan. The for taxpayers covered by
a pension plan where they work the deduction phases out : between $40,000
and REPORTING CAPITAL GAIN DISTRIBUTIONS
Taxpayers whose only capital gains or losses are their capital gain
distributions from mutual funds will be able to report these gains directly
on Form 1040 instead of using Schedule D. They should report the amount
on line 13 and check the box there. They will then use a worksheet in
the instructions to figure their tax.
SELF-EMPLOYED HEALTH INSURANCE DEDUCTION
Self-employed persons may now deduct up to 70% (100% in 2003) of their
health insurance premiums for every month they were not eligible to
participate in an employer-sponsored health plan.
STOP SMOKING PROGRAM
Deductible medical expenses now
include amounts paid for smoking cessation programs and prescription
drugs to treat nicotine withdrawal. Non-prescription drugs or patches
are not deductible. - Volume 2, Issue 22
|
HOME || PROFILE || SERVICES || USEFUL LINKS || NEWS || ALERTS
Copyright © 1998 - 2004. All rights reserved.