Under the American Taxpayer Relief Act (ATRA), the $125 monthly tax exclusion for employer-provided mass transit and vanpooling benefits has been hiked up to match the $240 monthly exclusion for parking fees, retroactive to Jan. 1, 2012. But ATRA didn’t explain how employers should handle this retroactive increase for the 2012 tax year. Now the IRS has issued valuable guidance to employers.
Small Business Tax Deduction Strategies
Section 179 vehicles should be a key part of your small business tax deduction strategies. Can Section 179 property fit in with your business tax strategies?
Let Business Management Daily help you get each and every rental property depreciation credit and business tax deduction you’re entitled to.
Q. I carried over a charitable deduction from 2011. Do I have to use it on my 2012 return?
If you haven’t filed your 2012 federal tax return yet, you may be scrambling to beat the April 15 deadline. In your haste, you could easily commit one of the blunders that often plague harried tax filers, or you might overlook certain tax breaks you’re legitimately entitled to. Here’s some advice for procrastinators.
Q. I haven’t seen any mention of an extension of favorable “basis” rules for estates. Was this in the new law?
The IRS is showing some additional leniency to firms that have misclassified workers as independent contractors for employment tax purposes.
You can swap one real estate property for another without paying any current federal income tax, as long you meet the requirements under Section 1031 of the tax code. Similarly, you can use the same technique to swap one life insurance policy tax-free for a comparable policy under Section 1035. But do you know that this tax law provision may also apply to different types of financial products?
Q. I have a Ford F-150 truck weighing more than 6,000 pounds and use it 100% of the time for business. Was the depreciation tax break for heavy vehicles like mine eliminated for 2012 as part of the fiscal cliff? S.C., via email
The IRS imposes strict substantiation rules for claiming charitable deductions on your 2012 return. If you donated appreciated property last year, you must obtain a qualified appraisal for a deduction exceeding $5,000. Rely on an independent professional for appraisals.
Thanks in part to the American Taxpayer Relief Act, certain business owners and real estate owners can continue to claim three generous deductions for 2012 on Form 4562, Depreciation and Amortization. The three breaks are as follows:
Q. I missed taking my required minimum distribution (RMD) from my IRA last year. Can I avoid a 2012 penalty before April 15? H.S., Rochester, N.Y.
