Yesterday the IRS announced a third round of their highly successful Offshore Voluntary Disclosure Initiative (OVDI) program. The OVDI was highly publicized with the 2009 revelation that several large Swiss banks, including UBS, were going to be cooperating with the IRS in disclosing the names of US citizens and residents holding Swiss bank accounts. Read more
With the end of the year coming up it seems appropriate to mention an often overlooked potential planning strategy. For some taxpayers who have very little ordinary income and still have deductions resulting in little to negative taxable income for the year, it may make sense to consider doing a Roth conversion on a portion of any tax-deferred retirement accounts. Read more
Thinking of converting your traditional IRA to a Roth IRA?
One advantage of this downturn in the market may be to convert your traditional IRA to a Roth IRA. Remember that you only pay tax on the value at the date of conversion (less your after tax contributions).
Did you already convert your traditional IRA to a Roth IRA in 2010?
If so you may still change your mind until October 17, 2011, even if you already filed your 2010 tax return. If the value of your Roth IRA has decreased since the original conversion, you should consider reversing back to a traditional IRA. After waiting 30 days, you may again convert the presumably lower value to a Roth IRA.
The rules for Roth IRA conversions and reversals are complex. Please contact your LMGW advisor before taking any action.
The .2% Federal Unemployment Tax (FUTA) surtax expired on June 30, 2011 bringing the FUTA tax rate before state unemployment credits to 6%. FUTA is paid on the first $7,000 of wages paid per year per employee. Now that the surtax has expired employers will be required to separately track FUTA taxable wages before July 1, 2011 and after June 30, 2011 since the FUTA rate is different between the two periods.
The IRS will be revising Form 940, the Employer’s Annual Federal Unemployment Tax Return. There have also been talks in Congress about making the surtax permanent but so far no legislation has been passed.
Ever made a donation of goods to a charity and wondered how to track and value those donated items? Now there is an App for that. UDoGood, available on the Apple AppStore allows you to track your donations of clothing, household items, cash, etc. UDoGood is a simple way to document, photograph and record your charitable donations. UDoGood also gives suggestions for determining the fair market value of your donations. At the end of the year you can email your list of donated goods to your tax preparer or to yourself. Read more
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