Posts Tagged ‘Thomas P. Quinn’
Sunday, December 19th, 2010 by Moore McLaughlin
Under pre-Act law, the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001, other than those made permanent or extended by subsequent legislation, were set to sunset and no longer apply to tax or limitation years beginning after 2010. Beginning in 2011, the EGTRRA sunset would have wiped out a host of favorable tax rules, such as: favorable income tax rate structure for individuals; marriage penalty relief; and liberal education-related deduction rules. Similarly, under Sec. 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003, the favorable tax treatment of long-term capital gain and qualified dividends would have ended after 2010.
The alternative minimum tax (AMT) exemption amounts were “temporarily” increased for four years by EGTRRA, and then “temporarily” increased again by a succession of tax laws. The ability of individuals to use most nonrefundable personal credits to offset AMT also is “temporary,” and has been extended over the years by a series of new laws. Under pre-Act law, after 2010, the AMT exemption amounts were to have plummeted to their pre-EGTRRA level, and individuals would not have been able to use most nonrefundable personal credits to offset AMT.
Finally, the American Recovery and Reinvestment Act of 2009 temporarily boosted the credit incentives for higher education (i.e., created the American Opportunity Tax Credit, or AOTC), and liberalized the rules for the refundable child tax credit and the earned income tax credit (EITC). Under pre-Act law, these ARRA incentives would have ended on December 31, 2010.
New law. Under 2010 Tax Relief Act Secs. 101 through 103, the Sec. 901 EGTRRA sunset, the Sec. 303 JGTRRA sunset, and the ARRA sunsets relating to the AOTC, child tax credit, and EITC are extended for two years (one year in case of the adoption rules).
Caution: Unless Congress acts, all of the favorable rules will revert after 2012 to their pre-EGTRRA, pre-EGTRRA, and pre-ARRA rules. For example, the tax rates for individuals in 2013 will be 15%, 28%, 31%, 36%, and 39.6%.
Stay tuned for more posts about this new tax law.
Tags: asset protection, Asset Protection Planning, business tax, Capital gains tax, corporate tax, income tax, internal revenue code, Internal Revenue Service, IRS and state tax collections, Moore McLaughlin, Providence, Rhode Island, Small Business Act, state taxes, tax, Tax planning, Thomas P. Quinn
Posted in 1031 Exchanges, Asset Protection Planning, Current Events, Estate Planning, IRS and state tax collections, Tax Current Events and News, Tax planning, Uncategorized
Sunday, December 19th, 2010 by Moore McLaughlin
At about 3:50 p.m. on Friday, December 17, 2010, President Obama signed into law the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.” This new law is a sweeping tax package that includes, among many other items, an extension of the Bush-era tax cuts for two years, estate tax relief, a two-year “patch” of the alternative minimum tax (AMT), a two-percentage-point cut in employee-paid payroll taxes and in self-employment tax for 2011, new incentives to invest in machinery and equipment, and a host of retroactively resuscitated and extended tax breaks for individuals and businesses. Here’s a look at the key elements of the package:
- The current income tax rates will be retained for two years (2011 and 2012), with a top rate of 35% on ordinary income and 15% on qualified dividends and long-term capital gains.
- Employees and self-employed workers will receive a reduction of two percentage points in Social Security payroll tax in 2011, bringing the rate down from 6.2% to 4.2% for employees, and from 12.4% to 10.4% for the self-employed.
- A two-year AMT “patch” for 2010 and 2011 will keep the AMT exemption near current levels and allow personal credits to offset AMT. Without the patch, an estimated 21 million additional taxpayers would have owed AMT for 2010.
- Key tax credits for working families that were enacted or expanded in the American Recovery and Reinvestment Act of 2009 will be retained. Specifically, the new law extends the $1,000 child tax credit and maintains its expanded refundability for two years, extends rules expanding the earned income credit for larger families and married couples, and extends the higher education tax credit (the American Opportunity tax credit) and its partial refundability for two years.
- Businesses can write off 100% of their equipment and machinery purchases, effective for property placed in service after September 8, 2010 and through December 31, 2011. For property placed in service in 2012, the new law provides for 50% additional first-year depreciation.
- Many of the “traditional” tax extenders are extended for two years, retroactively to 2010 and through the end of 2011. Among many others, the extended provisions include the election to take an itemized deduction for state and local general sales taxes in lieu of the itemized deduction for state and local income taxes; the $250 above-the-line deduction for certain expenses of elementary and secondary school teachers; and the research credit.
- After a one-year hiatus, the estate tax will be reinstated for 2011 and 2012, with a top rate of 35%. The exemption amount will be $5 million per individual in 2011 and will be indexed to inflation in following years. Estates of people who died in 2010 can choose to follow either 2010′s or 2011′s rules.
- Omitted from the new law: Repeal of a controversial expansion of Form 1099 reporting requirements.
- Also not included: Extension of the Build America Bonds program, which permits state and localities to issue federally-subsidized municipal bonds.
Watch for upcoming posts containing more detail on this new law. In the meantime, feel free to contact us with any questions you may have.
Tags: 1031 exchange real estate investment, alternative minimum tax, American Recovery and Reinvestment Act of 2009, AMT, and Job Creation Act of 2010, asset protection, Asset Protection Planning, business tax, Capital gains tax, collection, corporate tax, elderlaw, Estate Planning, income tax, internal revenue code, IRS and state tax collections, mclaughlin & quinn, Moore McLaughlin, Providence, real estate, Rhode Island, seniors, Social Security payroll tax, Tax planning, tax relief, Thomas P. Quinn, Unemployment Insurance Reauthorization
Posted in 1031 Exchanges, Asset Protection Planning, Bankruptcy, Current Events, Elderlaw/Law For Life, Estate Planning, Financial workout, IRS and state tax collections, Self-directed IRAs, Tax Current Events and News, Tax planning
Friday, November 5th, 2010 by Moore McLaughlin
Some individuals with substantial income in addition to salaries may find that the amount of tax withheld from their salaries is not enough to cover their required estimated tax payments. This may be the result of miscalculation, or forgotten surprises pleasant and unpleasant. A pleasant forgotten surprise might be a windfall on the sale of a capital asset earlier this year. An unpleasant one might be the realization by a taxpayer who claimed a first time homebuyer credit in 2008 that he must begin repaying the credit in 25 installments, beginning with the 2010 tax year. Increased withholding, as well as a couple of creative workarounds, can stave off an estimated tax penalty.
Background. An individual subject to the estimated tax must pay, on each of four installment dates (April 15, June 15, September 15 and January 15 of the following year for a calendar-year taxpayer), 25% of his “required annual payment” for the current year. The required annual payment generally is the lesser of 100% of the tax shown on the taxpayer’s return for the preceding year or 90% of his tax for the current year. However, in figuring 2010 estimated taxes, taxpayers whose 2009 AGI was over $150,000 have to pay the lesser of 110% of the tax shown on the 2009 return or 90% of their 2010 tax liability.
The applicable test is applied separately to each installment. Thus, a taxpayer may be penalized for the underpayment of estimated taxes for any installment for which his estimated tax payments plus taxes withheld from his salary don’t total at least 25% of his required annual payment.
An individual who has underpaid an estimated tax installment can’t avoid the penalty by increasing his estimated tax payment for a later period (although payment in a later period will reduce the period for which the penalty applies).
Increased withholding is one possible solution. Income tax withheld by an employer from an employee’s wages or salary is treated as paid in equal amounts on each of the four installment due dates unless the individual establishes the dates on which the amounts were actually withheld. Thus, if an employee asks his employer to withhold sufficient additional amounts for the rest of the year, the penalty can be retroactively eliminated. This is because the heavy year-end withholding will be treated as paid equally over the four installment due dates.
Illustration: Jennifer expects her 2010 tax liability to be $15,000. Her 2009 return showed a liability of $14,000. Her withholding for 2010 will total only $10,500 and she has made no estimated tax payments. If she makes an additional estimated tax payment of $3,000 on January 15, 2011, she will avoid any underpayment penalty for the last installment ($10,500 plus $3,000 equals $13,500, which is 90% of $15,000) but she may still be penalized for underpaying the first three installments. But if Jennifer instead has her employer withhold an additional $3,000 before the end of 2010, her total withholding ($13,500) will be treated as estimated tax payments of $3,375 on each of the installment due dates. Since $3,375 is 25% of $13,500 (90% of $15,000), the underpayment penalty would be completely avoided for all four installments.
Other amounts may also be treated as retroactive payments of estimated tax. The same rules described above in regard to amounts withheld from wages and salaries also apply to overpayments of Social Security taxes and to income taxes withheld from:
- supplemental unemployment compensation benefits, sick pay, pensions, annuities and other deferred income (e.g., 20% withholding on certain “eligible rollover distributions” from qualified retirement plans and other deferred income arrangements).
- interest and dividends subject to backup withholding.
- gambling winnings.
Recommendation: Another possible option for a taxpayer who has underpaid estimated tax is to take an eligible rollover distribution from a qualified plan before the end of 2010. Income tax will be withheld from the distribution and will be applied toward the taxes owed for 2010. The taxpayer can then timely roll over the gross amount of the distribution, as increased by the amount of withheld tax, to a traditional IRA. No part of the distribution will be includible in income for 2010, but the withheld tax will be applied pro rata over the full tax year to reduce previous underpayments of estimated tax.
Tags: 2010 estimated taxes, asset protection, Asset Protection Planning, business tax, Capital gains tax, estimated tax payments, estimated taxes, first time homebuyer credit, income tax, internal revenue code, Internal Revenue Service, IRS, IRS and state tax collections, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, tax, Tax planning, Thomas P. Quinn, year-end planning, year-end tax planning
Posted in Asset Protection Planning, IRS and state tax collections, Tax Current Events and News, Tax planning
Tuesday, October 26th, 2010 by Moore McLaughlin
Tax relief comes in many forms, whether it means eliminating penalties, settling your debt, or ensuring that the IRS does not seize your bank accounts or garnish your wages. If you owe money on your taxes, your plan for resolving this debt should include addressing all possible angles: Protection from IRS actions, determining ways to reduce the amount owed, and putting a plan into place that will permanently make worrying about taxes a thing of the past. 
McLaughlin & Quinn, LLC has published “9 Secrets to Success When You Owe the IRS” This list has been developed by the attorneys at McLaughlin & Quinn, LLC over the course of dozens of years in private practice and dozens more working for the IRS. Avoiding these landmines will significantly increase the odds of getting one’s tax life in order and moving on. Failure to know these secrets, and use them to your advantage can turn a potentially minor problem into a federal case.
This is the most straight-forward guide you will find anywhere on resolving taxes. In it you will learn:
- 9 Different Ways to Keep the IRS from Taking Action Against You
- How not to be afraid of the IRS
- How to avoid common mistakes
- Simple steps to keep you out of trouble
Downloading this guide is absolutely free.
Click here to download this Free guide.
Tags: 9 Secrets to Success When You Owe the IRS, asset protection, Asset Protection Planning, business tax, Capital gains tax, collection, corporate tax, Estate Planning, income tax, internal revenue code, Internal Revenue Service, IRS, IRS and state tax collections, levy, lien, mclaughlin & quinn, Moore McLaughlin, Owe the IRS, Providence, Rhode Island, sales tax, state taxes, tax, Tax planning, tax relief, Thomas P. Quinn
Posted in Asset Protection Planning, Bankruptcy, Current Events, Elderlaw/Law For Life, Estate Planning, Financial workout, IRS and state tax collections, McLaughlin & Quinn News, Tax Current Events and News, Tax planning
Tuesday, October 26th, 2010 by Moore McLaughlin
This past year has seen a multitude of new cases affecting Massachusetts taxes. Click here for a well written summary of these cases by Scott M. Susko and Richard L. Jones. These cases range from domicile cases in the personal income tax context to sales tax nexus cases to the sales-factor sourcing rules, and others.
McLaughlin & Quinn, LLC Partners Moore McLaughlin and Tom Quinn represent Massachusetts taxpayers, both individuals and businesses, on a regular basis in tax planning matters as well as audits, appeals and in court. Feel free to contact either Moore McLaughlin at 401-421-5115 ext. 212 or by e-mail at mmclaughlin@mclaughlinquinn.com or Tom Quinn at 401-421-5115 ext. 218 or by e-mail at tquinn@mclaughlinquinn.com.
Tags: business tax, domicile, income tax, IRS and state tax collections, LLC, Massachusetts, Massachusetts domicile, Massachusetts personal income tax, Massachusetts sales tax nexus, Massachusetts sales-factor sourcing rules, Massachusetts taxes, mclaughlin & quinn, Moore McLaughlin, personal income tax, sales tax, sales tax nexus, sales-factor sourcing rules, Thomas P. Quinn
Posted in Asset Protection Planning, Estate Planning, IRS and state tax collections, Tax Current Events and News, Tax planning
Sunday, October 24th, 2010 by Moore McLaughlin
Join the attorneys from McLaughlin & Quinn as they present at SCORE’s 14th Annual Tax Update Seminar on Friday, December 4, 2010 at the Crowne Plaza Hotel in Warwick, Rhode Island. This seminar will qualify for up to 8 hours of CPE.
SCORE is the Service Corps of Retired Executives. Small business owners can tap into the vast resources of the retired executives at SCORE for assistance in all aspects on running a small business. The funds raised at the 14th Annual Tax Update Seminar will support the good work done by the men and women of SCORE.
Register on-line at www.McLaughlinQuinn.com soon. Space is limited. Register before November 3 to receive the earlybird discount.
We hope to see you there at this great event.
Tags: 14th Annual Tax Update, Crowne Plaza Hotel, Frank Fiore, Jill E. Sugarman, Jill Sugarman, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, SCORE, Service Corps of Retired Executives, Small Business Act, Small Business Jobs Act, Small Business Jobs Act of 2010, state taxes, tax, Thomas P. Quinn
Posted in Current Events, McLaughlin & Quinn News, Seminars, Tax Current Events and News, Tax planning
Friday, October 15th, 2010 by Moore McLaughlin
The following is the tenth in a series of blog posts providing a summary of the most important tax developments that have occurred in the past three months that may affect you, your family, your investments, and your livelihood. Please call us for more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.
Simplified per diem rates lowered effective October 1, 2010.
Reimbursements of an employee’s business travel costs (lodging, meal and incidental expenses (M&IE)) at a per diem rate are payroll-and income-tax free if simplified substantiation is provided and the daily rate does not exceed the federal per diem rate (the maximum amount that the federal government reimburses its employees) for the locality of travel for that day. While the per diem rates vary by travel destination, employers can make reimbursements at the simplified “high-low” per diem rates, which assign one per diem rate to high-cost areas within the continental U.S., and another to non-high-cost areas. The IRS has issued the “high-low” simplified per diem rates for post-September 30, 2010, travel. An employer may reimburse up to $233 for high-cost localities ($168 for lodging and $65 for M&IE) and $160 for other localities ($108 for lodging and $52 for M&IE). The list of high-cost areas is also updated.
For more information, please contact Partner Moore McLaughlin at 401-421-5115 ext 212 or by e-mail at mmclaughlin@mclaughlinquinn.com.
Tags: employee's business travel costs, federal per diem rate, income tax, Internal Revenue Service, IRS, IRS and state tax collections, mclaughlin & quinn, Moore McLaughlin, per diem, per diem rates, Providence, Rhode Island, tax, Tax planning, Thomas P. Quinn
Posted in Current Events, IRS and state tax collections, Tax Current Events and News, Tax planning
Friday, October 15th, 2010 by Moore McLaughlin
The following is the eighth in a series of blog posts providing a summary of the most important tax developments that have occurred in the past three months that may affect you, your family, your investments, and your livelihood. Please call us for more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.
Relief for homeowners with corrosive drywall.
The IRS is allowing individuals with corrosive drywall to apply a safe harbor formula to treat the costs of repairing the defective drywall as a casualty loss. The safe harbor applies for original and amended federal income tax returns filed after September 29, 2010. Reported problems have occurred with certain imported drywall installed in homes between 2001 and 2008. Homeowners have reported blackening or corrosion of copper electrical wiring and copper components of household appliances, as well as the presence of sulfur gas odors. In the case of any individual who pays to repair damage to his personal residence or household appliances that results from corrosive drywall, the IRS won’t challenge his treatment of damage resulting from corrosive drywall as a casualty loss (which might otherwise be difficult to achieve under the regular rules) if the loss is determined and reported under the safe harbor rule. A taxpayer who does not have a pending claim for reimbursement may claim as a loss all unreimbursed amounts paid during the tax year to repair damage to his personal residence and household appliances resulting from corrosive drywall. A taxpayer who has a pending claim (or intends to pursue reimbursement) may claim a loss for 75% of the unreimbursed amount paid during the tax year to repair damage to the taxpayer’s personal residence and household appliances that resulted from corrosive drywall.
For more information, please contact Partner Moore McLaughlin at 401-421-5115 ext 212 or by e-mail at mmclaughlin@mclaughlinquinn.com.
Tags: corrosive drywall, drywall, income tax, Internal Revenue Service, IRS, IRS and state tax collections, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, tax, Tax planning, Thomas P. Quinn
Posted in Current Events, Tax Current Events and News, Tax planning
Tuesday, October 12th, 2010 by Moore McLaughlin
The following is the fifth in a series of blog posts providing a summary of the most important tax developments that have occurred in the past three months that may affect you, your family, your investments, and your livelihood. Please call us for more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.
Regulations on election to defer COD income.
For debt discharges in tax years ending after December 31, 2008, a taxpayer may elect to have any cancellation of debt (COD) income from the reacquisition of an applicable debt instrument after December 31, 2008, and before January 1, 2011, included in gross income ratably over five tax years. The IRS has issued two sets of regulations on this rule: one applies to C corporations, the other applies to partnerships and S corporations. The regulations cover many complicated issues that arise with the election. For example, the C corporation regulations cover topics such as acceleration of deferred cancellation of debt (COD) income and deferred original issue discount deductions, and the calculation of earnings and profits as a result of making an election.
For more information, please contact Partner Moore McLaughlin at 401-421-5115 ext 212 or by e-mail at mmclaughlin@mclaughlinquinn.com.
Tags: asset protection, Asset Protection Planning, cancellation of indebtedness income, Capital gains tax, COD, corporate tax, debt cancellation, income tax, internal revenue code, Internal Revenue Service, IRS, IRS and state tax collections, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, Small Business Act, Small Business Jobs Act, Small Business Jobs Act of 2010, state taxes, tax, Tax planning, Thomas P. Quinn
Posted in Asset Protection Planning, Bankruptcy, Current Events, Financial workout, IRS and state tax collections, Tax Current Events and News, Tax planning
Tuesday, October 12th, 2010 by Moore McLaughlin
The following is the fourth in a series of blog posts providing a summary of the most important tax developments that have occurred in the past three months that may affect you, your family, your investments, and your livelihood. Please call us for more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.
Guidance explains longer NOL carryback option for businesses.
The IRS has issued guidance in a question and answer (Q&A) format to address a number of specialized issues that have arisen under the new optional longer net operating loss (NOL) carryback period that was provided by the Worker, Homeownership, and Business Assistance Act of 2009 (WHBAA). Under WHBAA, an irrevocable election of a 3, 4, or 5-year carryback period for an applicable NOL for a tax year ending after December 31, 2007, and beginning before January 1, 2010, is generally available for one tax year (except for an eligible small business (ESB) loss). The WHBAA election is an expansion of the increased carryback period election provided by the American Recovery and Reinvestment Act of 2009 (ARRA), which was available only to ESBs, and only for 2008 NOLs. The guidance addresses many questions left unanswered by the statutory provisions. For example, it makes clear that if a taxpayer previously made an ARRA election, it does not have to continue to qualify as an ESB in the year of the WHBAA NOL in order to make a WHBAA election. A taxpayer must qualify as an ESB only for the tax year of the ARRA election. Also, the IRS has revised the Instructions for Form 1139, Corporation Application for Tentative Refund (Rev. August 2010), to explain how businesses make the WHBAA election.
For more information, please contact Partner Moore McLaughlin at 401-421-5115 ext 212 or by e-mail at mmclaughlin@mclaughlinquinn.com.
Tags: ARRA, asset protection, Asset Protection Planning, ESB, income tax, internal revenue code, Internal Revenue Service, IRS, IRS and state tax collections, mclaughlin & quinn, Moore McLaughlin, net operating loss, Net operating loss carryback, NOL, NOL carryback, Providence, Rhode Island, Small Business Act, Small Business Jobs Act, Small Business Jobs Act of 2010, state taxes, tax, Tax planning, Thomas P. Quinn, WHBAA
Posted in Current Events, Financial workout, IRS and state tax collections, Tax Current Events and News, Tax planning
