Q: How much can I give as a gift each year?
A: You can gift up to $14,000 to each recipient for 2013. A Gift Tax return will be required for gifts over that amount.
Q: What is the Standard Business Mileage Rate?
A: For 2013 the rate is 56.5 cents and for 2012 the rate is 55.5 cents per mile.
Q: What are Capital Gains rates for 2012?
A: For taxpayers in the 10% or 15% bracket the rate for Long Term Captal Gains is 0%, for all other brackets 15%.
Q: I purchased some supplies for my business in December 2012 using a credit card. Can I take the deduction in 2012?
A: Yes, even though you did not pay the credit card balance until the following year you can still take a deduction for the purchase in the year purchased.
Q: Should I take the Standard Deduction or Itemized Deductions this year?
A: Generally you would calculate the tax due based on the Standard Deduction and then the Itemized Deductions method to determine which gives you the greater tax advantage. For 2012 the Standard Deduction is $11,900 for Married and $5,950 for Single. Your Itemized Deductions would need to add up to more than the Standard Deduction to make it worth claiming.
Itemized deductions can include:
- Medical and Dental Expenses
- State Taxes and Real Estate Taxes
- Home Mortgage Interest and Point
- Charitable Contributions
- Business expenses
- Other miscellaneous
Q: I want to take my Social Security Benefits early. How will earned income impact my benefits?
A: Your benefits will be cut $1 for every $2 earned in excess of $15,120 for 2013 if you are under the age of full retirement. If you are over the full retirement age then you can earn unlimited amounts of wages and still receive your full Social Security Benefits.
Q: How much tax should I have paid in for 2012?
A: If you will owe $1,000 or more in taxes after subtracting withholding and credits, you could be subject to penalties for underpayment. The Internal Revenue Service has allowed a safe harbor provision that will avoid any underpayment penalties. Make sure you have paid in at least 90% of the tax for the current year or 100% of the tax for the preceding year’s return. If your adjusted gross income is over $150,000 for married and $75,000 for single you must have paid in at least 110% of the tax for the preceding year’s return. You can use the Estimated Tax Worksheet in the instructions for Form 1040-ES to determine whether you fall within the safe harbor provisions.