Small Business Tax

At long last, the IRS has issued guidance on a special election for estates of individuals who died in 2010.

If you’re getting a divorce, there’s more on your mind than taxes. Still, if you make a few tax-smart moves before the decree is finalized, you can save big bucks down the road. Here are four tips:

Is converting a traditional IRA to a Roth this year a good idea? It de­­pends on the situation. Weigh the pros and cons. Although taxpayers no longer can benefit from a special tax break for conversions in 2010, converting to a Roth still might be a smart tax move. Of course, the conversion is subject to current income tax.

Q. Can I get a tax deduction for buying one of the new plug-in vehicles?

The IRS has released an updated list of 275,000 organizations that have lost their tax exemption because they haven’t filed tax returns for at least three years. It believes that most of the organizations are now defunct. Nevertheless, the IRS has provided procedures allowing these charities to obtain reinstatement.

Now that Congress has finally approved a debt ceiling agreement, you can expect another issue to gridlock both chambers now: tax reform.

The IRS is giving some taxpayers extra time to “come clean” about foreign bank accounts. In new guidelines posted on its web site, the IRS has said it will postpone for up to 90 days the deadline for participating in its offshore voluntary disclosure program. The initial deadline was Aug. 31, 2011.

Undoubtedly, the deduction for charitable donations is one of the biggest write-offs on your personal tax return. That’s why the IRS continues to scrutinize deductions claimed by high-­income taxpayers. Strategy: Stick to the strict letter of the law. Be aware that recent tax law changes impose tough substantiation rules on cash and cash-equivalent donations.

In a relatively quiet move reported in The Wall Street Journal, the IRS is now requiring companies being audited to turn over exact copies of the electronic records kept in their business software programs. Small business groups have begun to fight back against this practice.

The IRS is making it easier for tax return filers to qualify as an “innocent spouse.” In a new ruling, the agency eliminates a strict timing requirement under prior law. And it says that other taxpayer-friendly changes are on the way.