Archive for the ‘Taxation’ Category

As of January 1, 2013, Congress agreed upon legislation that would prevent the expiration of many tax deductions and favorable tax rates.  The American Taxpayer Relief Act of 2012 (PL 112-240) was officially signed into law by President Obama on January 2, 2013.  The following is a summary of the more popular provisions of the legislation: Read the rest of this entry »

The proper payment of all taxes is essential for any business. Generally, Pennsylvania taxes applicable to manufacturers of malt or brewed beverages are not that different then those taxes applied to other businesses with the exception of the malt beverage tax. The following is a brief summary of the Pennsylvania taxes a manufacturer is likely subject to. Read the rest of this entry »

Commercial and residential real property owners whose property suffered damage as a result of the storm “Sandy” may be entitled to property tax relief in the form of a reduction of the assessment on the property. Where real property has been destroyed or altered in a way that the property value has “materially depreciated,” the property tax may be adjusted accordingly. If your property has been damaged, destroyed or “materially depreciated” by the storm, you should immediately notify your local property tax assessor. If notified prior to January 10, 2013, the assessor must value the property as of January 1, 2013, and therefore consider the present condition of the property. If no notice is provided to the assessor by January 10, however, this opportunity will be lost.

If you have questions, please contact Nicholas F. Pellitta at 908-252-4164 or nfpellitta@nmmlaw.com.

On February 22, 2012, President Obama signed the Middle Class Tax Relief and Job Creation Act – a version that no longer contained provisions to ease restrictions on the operation and expansion of physician-owned hospitals. Please click here to read an article I authored for MD News, where I discuss the obstacles facing physician-owned hospitals.

For more information about restrictions on physician-owned hospitals, please contact Peter Lehr at plehr@nmmlaw.com.

Although the filing deadline generally occurs on April 15, the deadline to file a 2011 federal income tax return is April 17, 2012.  The reason for the 2-day extension is that April 15 is on a Sunday and April 16 is Emancipation Day, a holiday celebrated inWashington, D.C.  Although the holiday is not celebrated in Pennsylvania, the deadline to file a Pennsylvania income tax return is also extended to April 17, 2012 to avoid confusion.

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The Internal Revenue Service continues to offer an Offshore Voluntary Disclosure Initiative (“OVDI”) for United States citizens and residents who are required to report their interests in foreign financial accounts.  On Friday, August 26, due to concerns regarding the potential impact of Hurricane Irene, the IRS announced that it will extend the due date for OVDI requests until September 9, 2011.  The original deadline was August 31, 2011.  If a taxpayer is unable to complete an OVDI request by September 9, the taxpayer may request a 90-day extension. 

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In response to former President Bush’s tax cuts, the Republicans and Democrats agreed upon the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Public Law 111-312.  Signed into law on December 17, 2010, the Tax Relief Act of 2010 affects personal income taxes, business income taxes, and estate/gift taxes.

Charitable IRA Distribution

It has been extended to 2010 and 2011 that a taxpayer can make an IRA distribution of no more than $100,000 to a charitable organization without including such amount in reportable income.  The taxpayer must be 70.5 years old or older.  This distribution will count towards the taxpayer’s required minimum distribution.

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In response to former President Bush’s tax cuts, the Republicans and Democrats agreed upon the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Public Law 111-312.  Signed into law on December 17, 2010, the Tax Relief Act of 2010 affects personal income taxes, business income taxes, and estate/gift taxes.

Student Loan Interest

The student loan interest deduction has seen an extension of increased phaseout thresholds to 2011 and 2012.

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In response to former President Bush’s tax cuts, the Republicans and Democrats agreed upon the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Public Law 111-312.  Signed into law on December 17, 2010, the Tax Relief Act of 2010 affects personal income taxes, business income taxes, and estate/gift taxes.

Personal Income Tax: Rates

Per the chart below, ordinary income tax rates for 2010 have been extended through 2011 and 2012.  The 2013 rates listed would have been applicable in 2011 had this law not been passed.

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In response to former President Bush’s tax cuts, the Republicans and Democrats agreed upon the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Public Law 111-312.  Signed into law on December 17, 2010, the Tax Relief Act of 2010 affects personal income taxes, business income taxes, and estate/gift taxes.  The estate tax, enacted in 1916, taxes accumulated wealth over a lifetime of a decedent, less deductions, and is subjected to credits.  The gift tax is a backstop to the estate tax, preventing a person from avoiding estate tax by disposing of their entire wealth during their lifetime.

Estate Tax

The gross estate includes all property owned by the decedent upon death.  Deductions are allowed for debts, liabilities, and administrative and funeral expenses.  Deductions are also available for any gifts to charities and any distribution of wealth to a surviving spouse.  The estate tax rate is applied against a taxable estate, which is the gross estate less the allowable deductions.  The estate tax is then reduced by a unified credit.

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