There were many recent tax law changes, but here are some highlights that may impact many clients of our firm.  Please contact us if you have any questions about these changes or other tax matters.

Estate Tax Laws are completely different than they have been in the past or probably will be again. Consequently, if you have had a death in your family (even if it is a spouse), you should meet with us to discuss possible tax implications.

Custodial Parents can elect to claim a tax exemption for a dependent even if a divorce decree grants it to a non-custodial parent or the exemption was previously released on Form 8332. A Form 8332 must be sent to the non-custodial parent sometime during the calendar year before the tax year in which the exemption will be claimed. (Sending the form in 2012 means the credit can be claimed on the 2013 taxes)

For Businesses: Many small employers that pay at least half of the premiums for employee health insurance coverage may be eligible to claim the Small Business Health Care Tax Credit. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ 25 or fewer workers with average income of $50,000 or less. If you think you qualify, please call us to discuss.

For Businesses: In early 2012,, you will be receiving a 1099-K from your credit card company and from Pay Pal or other on-line financial firms. This informational return (furnished to both you and the IRS) will list money you received via credit cards and on-line payments separately from income you receive via cash and checks. Make sure you include your 1099K in the data you provide to us!

For People with Rental Property: You are required to issue Form 1099 in January 2012 for anyone who did more than $600 of work for you in 2011. This includes gardeners, handymen, electricians, plumbers, managers, etc. We strongly suggest that you not allow anyone to begin work for you without first filling out a W-9 form and also verifying that they have a business license with the state where your rental property is located. If you need a Form W-9, we can provide you with one or you can download it from www.IRS.gov

Investors: As of January 1, 2011, brokerage firms will be reporting all cost basis as FIFO (First In First Out) by default. This may not be the most advantageous for you. You should call your broker to determine if average cost basis, LIFO (Last In-First Out), or HIFO (Highest In-First Out) would be more advantageous for you.

Property Owners: We suggest that all property owners take the opportunity in the new year, to make sure their home owners insurance is adequate to cover you in the case of a total loss (fire, tree falling on house, earthquake, etc.).

Your Beneficiaries: Lastly, everyone who has an IRA, 401-K, Annuity, or Life Insurance should verify that the beneficiary is who you think it is and is still appropriate. The beneficiary listed supersedes any court documents (such as divorce, etc) or anything in your will.

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IRS Circular 230 requires us to notify you that any advice contained in this communication is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding tax penalties that may be imposed by law.