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Tax Tips Newsletter
Serving you since 1993
July 2012 - Vol 7, Issue 7
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Greetings!
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I hope you had a wonderful 4th of July.

If you are a business client, don't forget to get your information in by the first of August to make sure that your returns are filed by September 15th.

The IRS is conducting many more correspondence audits than they have in the past. What's that? it means that if they have a question about something on your return or they think that the numbers on your return do not match the 1099s that were filed, they send you a letter. If you get a letter or notice from any taxing authority, please make sure you send me a copy to review before you respond to it. Many times your returns are correct and they just need additional information or an explanation.

The office will be closed on Friday, July 13th so we can all attend a seminar. We will be checking messages and e-mails.

Be sure to "friend" me on Facebook. I'm at Linda L. Heineman, CPA. I send out great tax tips once a week!

Doctor
In a 5 to 4 decision, the Supreme Court ruled on June 28 that most of the "Patient Protection and Affordable Care Act of 2010" was constitutional. Chief Justice John Roberts wrote the majority opinion that rejected the individual insurance mandate under the commerce clause of the Constitution, but upheld it as part of Congress's power to tax.

In addition to upholding the individual insurance mandate, the ruling means that the tax changes scheduled for 2013 were also upheld as constitutional. These include an increase in the Medicare tax on wages and a new Medicare tax on unearned income for single taxpayers with income over $200,000 and married couples with income over $250,000. Also, the threshold for deducting unreimbursed medical expenses for those under age 65 will increase to 10% of adjusted gross income, up from the current 7.5% threshold.

Though future tax legislation could change these provisions, you should be aware of them in your tax planning for this year and next. To discuss how this landmark Court decision could affect your tax situation, give me a call.
Wedding Bliss
Will wedding bells be ringing for you or a family member this summer? If so, add tax updating to the long list of things to do.

Here are some of the tax concerns newlyweds need to take care of.

* Check the effect marriage will have on your tax bill. If both spouses work and earn about the same income, you may pay higher taxes due to the "marriage penalty." You may need to adjust your tax withholding to avoid a big tax bill next April, and perhaps even penalty and interest charges for underpayment of taxes.

* Notify the Social Security Administration if you change your name.

* Notify the IRS of your address change if you move to a new home.

* File new Forms W-4 at work to reflect your married status.

* If either of you has an IRA, check the effect marriage will have on the deductibility of contributions.

* Update your estate plan, making appropriate changes to wills, powers-of-attorney, health care directives, etc.

* Review the beneficiary designations on your retirement plans and insurance policies.

For assistance with these items or with any tax concern, give me a call.
Flag & Eagle
Tax Tip of the Week: Does your midyear tax plan include selling investments? Read up on how you can save some money if you're eligible for an income tax benefit. Check out the article on my web site and call me with any questions.

Business Tip of the Month: Developing and maintaining a strong credit and collection policy is a balancing act. There are some good tips in this article to help you establish sensible credit and collection policies.

Financial Tip of the Month: Do you know what your FICO credit score is and what it is based on? Check out this informative article to learn more about the importance of maintaining good credit.

Fraud Alert: Are you a victim of identity theft? There are some things you can do immediately to limit the fraudulent use of your credit. Read the article for some great tips on what to do if this happens to you.

https://www.facebook.com/pages/Linda-L-Heineman-CPA/266124360085715?ref=tn_tnmn

Photos © Bigstockphotos.com, istockphoto.com, Felix Orona>

Sincerely,
Linda Heineman
Linda L. Heineman, CPA

phone: 626-577-0979