Small Business Tax

Every year, Bankrate publishes a list of “zany” tax deductions culled from the files of accountants around the country. Here are the highlights from this year’s list.

Q. My wife and I have a spousal IRA. Can we contribute to a spousal Roth IRA?

Taxes aren’t always about form over substance. In a new case, the IRS granted a dependency exemption for a child to a noncustodial parent even though the requisite tax form wasn’t signed by the custodial parent.

Although numerous tax breaks may be going by the boards at year-end, older taxpayers don’t have to wait to see what happens to one tax provision that already expired. Strategy: Make a charitable donation from your IRA. In other words, have your IRA custodian transfer the funds directly to the charity without ever touching the money.

Undoubtedly, you’ve worked hard for a long time to amass your current wealth. It would be a shame if creditors or litigious individuals attack your family fortune. Strategy: Set up an Alaska trust to protect your assets.

You can expect the Social Security tax wage ceiling to keep growing, according to the Board of Trustees for the Social Security Administration.

Tax-savvy investors know to watch out for the “wash sale” rule. But now there’s an extra wrinkle. New cost basis reporting rules apply to mutual fund shares acquired after 2011.

You’re going to hear a lot about “harvesting” capital gains and losses later this year. It’s all tied into the scheduled demise of the Bush tax cuts. Strategy: Line up the capital gains and losses you expect to recognize. Depending on your situation, you may want to harvest losses soon to offset gains or vice versa.

Proposed legislation, the so-called Ex-Patriot Act, targets expatriates who make money in the United States without paying a fair tax load. The proposal was triggered by the news that Eduardo Saverin, co-founder of Facebook, stands to save $100 million because he renounced his U.S. citizenship prior to Facebook’s initial public offering.

A new Tax Court case appears to create a blueprint for passing assets to heirs through a family limited partnership (FLP). The case upholds a formula clause for valuing the FLP interests passed to other family members. The IRS has sometimes successfully challenged such clauses in the courts, but this time the Tax Court sided with the taxpayers.