Oct. 1, 2013 deadline to send employee notices
The Affordable Care Act (ACA) requires all employers provide notice of "exchanges" or "marketplaces" to employees by Oct. 1, 2013, and to any new hires after this date within 14 days of the start date. All emloyees, regardless of full/part-time emloyment status, must receive the notice.
The notice should include the following:
- Information on the existence of exchanges, a description of the services provided and how to contact and seek assistance from the exchange;
- Notice that employees may be eligible for a premium tax credit or cost sharing reduction through the exchange if the employer?s plan does not meet minimum value;
- Notice that employees may lose the employer contribution if they opt-out of group coverage to purchase coverage through the exchange.
Minnesota law changes affect 2012 taxes for some individuals
ST. PAUL, Minn.: Minnesota has adopted most federal tax changes enacted by Congress for the 2012 tax year under a new law signed by Gov. Mark Dayton. The changes will provide $...18.5 million in tax benefits to Minnesotans.
Conforming to federal tax law also helps provide clear and consistent rules that help reduce taxpayer confusion and makes it easier to calculate and file state tax returns. Legislation enacted February 20, 2013, adopts all of the federal tax provisions enacted since April 14, 2011 that affect federal taxable income for tax year 2012, except:
- The increased federal section 179 expensing is subject to an addback of 80 percent in the first year and a five-year recovery, as under current state law, and the additions related to the phase out of itemized deductions and personal exemptions, and the standard deduction for married taxpayers, which were enacted in 2011, are unaffected by this new law.
The new law eliminates the need for the 2012 Schedule M1NC, Federal Adjustments. It also eliminates the need to add back the federal educator expenses and college tuition and fees deductions on lines 16 and 37 of Schedule M1M, Income Additions and Subtractions, for tax year 2012. For taxpayers who have not yet filed their 2012 Form M1:
- Do not complete Schedule M1NC. The schedule is now obsolete.
- Do not complete lines 16 and 37 of Schedule M1M. This adjustment on the 2012 Minnesota return is no longer required of taxpayers who deducted educator expense or college tuition and fees on their federal return.
- Use the Schedules M1NR, M1CD, M1ED, and M1MT, revised February 2013, if they are:
- part-year residents or nonresidents
- claiming the child and dependent care credit, or the K-12 education credit
- reporting alternative minimum tax
For those taxpayers who have already filed their Minnesota return and included Schedule M1NC or reported an amount on Schedule M1M, lines 16 or 37:
- Do not file an amended return.
- The department will review filed returns that reported an amount on Schedule M1M, lines 16 and 37, and/or included Schedule M1NC, to determine if adjustments are required based on available information. When possible, the department will make needed adjustments, notify taxpayers of changes and send any additional refunds due.
- Taxpayers will be notified if further action is required by them.
The new law, which applies only to the 2012 tax year, conforms Minnesota's income tax laws to most federal changes enacted through January 3, 2013.
For additional information including the most current forms, schedules and instructions go to the Minnesota Department of Revenue website at www.revenue.state.mn.us.
If you have kids in K-12, you may be missing this state deduction.
The deduction for mortgage insurance could easily be missed this year. The 2012 Form 1098 does not contain a box for qualified mortgage insurance premiums. This is likely due to the fact that the new tax bill was passed in January when mortgage companies were already in the process of issuing 1098s. The mortgage insurance premiums are deductible for 2012 and 2013, but you will need to let us know if you have them.
The Internal Revenue Service issued its annual ?Dirty Dozen? list of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.
National Taxpayer Advocate Nina E. Olson released her annual report to Congress, identifying the combination of the IRS? expanding workload and declining resources as the most serious problem facing taxpayers. The result, the report says, is inadequate taxpayer service, erosion of taxpayer rights, and reduced tax compliance. The advocate expressed her continuing concern that the IRS? expanding use of automated processes to adjust tax liabilities is causing harm to taxpayers and recommended that Congress enact a comprehensive Taxpayer Bill of Rights.
Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2011 and the years ahead.
The saver?s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Also known as the retirement savings contributions credit, the saver?s credit is available in addition to any other tax savings that apply.
from e-News for Tax Professionals
The IRS released standard mileage rates for use in 2012:
Business miles - 55½ cents per mile.
Medical or moving miles - 23 cents per mile
Charitable miles - 14 cents per mile.
Rather than using the standard mileage rates, taxpayers may instead use their actual costs if they maintain adequate records and can substantiate their expenses.
401(k) & 403(b):
Maximum contribution - $17,000
Catch-up contribution (50 and older) - $5,500
SIMPLE or SIMPLE 401(k):
Maximum contribution - $11,500
Catch-up contribution (50 and older) - $2,500
Maximum contribution - 25% of wages up to $50,000 or
20% of SE income after 1/2 SE tax up to $50,000
Traditional & Roth IRA:
Maximum contribution - $5,000
Catch-up contribution (50 and older) - $1,000
The IRS has made changes to its lien filing practices that will lessen the negative impact on taxpayers. The changes include:
- Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.
- Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
- Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
- Creating easier access to Installment Agreements for more struggling small businesses.
- Expanding a streamlined Offer in Compromise program to cover more taxpayers.