Individual Newsletter
 
Tax Deadlines 

June 17, 2013
The deadline for the second quarter estimated tax
payment is June 17, 2013. Tennessee residents must submit their payment to the Internal Revenue Service Center, P O Box 931100, Louisville, KY 40293-1100, using Form 1040ES. Checks should be made payable to the "United States Treasury."  If you want to wire your payment to the IRS go to EFTPS.gov.
 
October 15, 2013 
 If an extension was filed by April 15, 2013, the deadline for filing your 2012 federal income tax return is October 15, 2013.  We are working on extensions and will contact you soon. If we do not have your tax information, please provide this to us ASAP.  This is the final deadline.

Tax Extensions are a Good Thing

 

Brokerage firms have later deadlines for submitting Form 1099s and amended Form 1099s can cause a time crunch during a very busy season. Please be patient as this may continue due to the ever increasing amount of information that the IRS is requiring from brokers and taxpayers.    Filing a tax extension allows everyone six additional months to complete the tax return and ensure that all of your interest, dividend and capital gain or loss amounts are final.  Tax extensions are a good thing however, it is important to have all of the taxes paid by April 15th in order to not be charged a penalty and interest for any payments made after the April 15th deadline.

 

 

 

I know everyone would like to forget about taxes and just enjoy the summer time festivities of a beach vacation, a trip to the mountains or just staying home for vacation.

 

 

However, this newsletter is your reminder about your tax obligations and serves to update you on important tax provisions.

 

Tax Highlights 

 

The American Taxpayer Relief Act of 2012 - The following tax provisions take effect in 2013.  Some of these were mentioned in one of our previous newsletters but were proposed tax changes at that time and now they have been made final.
    • The personal exemptions and itemized deduction phaseout rules are back for 2013 and later. High-income taxpayers could have their personal exemption deduction completely phased out and also lose up to 80% of their mortgage interest; state and local taxes, charitable contributions and miscellaneous deductions.  For 2013, the threshold applicable for this phase-out is $250,000 for single taxpayers, $300,000 for filing jointly, $275,000 for head of household and $150,000 for married filing separately. The exemption deductions are reduced by 2% for each $2,500 by which AGI exceeds the threshold. The total amount of itemized deductions is reduced by 3% of the amount by which AGI exceeds the threshold. 
    • An additional 0.9% Medicare Hospital Insurance tax will apply to earnings of self-employed individuals or wages of an employee who receives in excess of $200,000 ($250,000 if filing jointly). Self-employed individuals will not be permitted to deduct any portion of the additional tax on their tax return.
    • The new 3.8 % Medicare Surtax will begin in 2013 and will only be imposed on unearned income such as interest, dividends, capital gains, annuities, passive income royalties and rents but not tax-exempt interest. Taxpayers subject to this new tax include single filers with Modified Adjusted Gross Income (MAGI) over $200,000, and joint filers with MAGI above $250,000. Please note:  This tax will effect estates and trusts whose income exceed $11,950. 
Mileage Rates for 2013
 
Business Miles:      56.5 cents per mile
Medical Miles:       24.00 cents per mile
Moving Miles:        24.00 cents per mile
Charitable Miles:  14.00 cents per mile
 
Warning - You must keep a mileage log to substantiate any tax deduction dealing with mileage. 
A free one hour financial planning consultation is being offered by Kevin Gormley who is a CPA with Accounting Consultants Inc. and a Certified Financial Planner with Patriot Investment Management.  Please call Kevin at 865/617-6237 or 865/588-5288 to take advantage of this opportunity.
 
Always feel free to contact us with your accounting and tax needs. 
Give us a call today at 865/588-5288!   We always appreciate your business.                                           Tamra G. Murr, CPA