As you may have heard by now, we are not going over the fiscal tax cliff! Below is a quick summary of the retroactive tax changes that may have an effect on any tax planning that was done in December.

2012 -These items lapsed after 2011, but have now been revived retroactively for 2012:

*Research and Development Tax Credit

*Work Opportunity Credit for Disadvantaged Workers

*15 Year Depreciation for Restaurant Renovations/Leasehold Improvements

*100% gain exclusion for investors in small reg. corp. stock

*Income tax exclusion for up to $2 mil. of forgiven personal mortgage debt

*Election to write off sales taxes in lieu of state income taxes

*Deductions for teachers’ class supplies, private mortgage insurance and college tuition

*American Opportunity Tax Credit

*Qual. Charitable Distributions direct transfers up to $100,000 tax from from IRA’s to charity

*Alternative Minimum Tax Exemption increased to $78,700 (had reverted back to $45,000)

*Section 179 Expensing up to $500,000 of qualified assets.

Due to these retroactive changes and increased fraud prevention measures the IRS is expecting refunds to be delayed. There is also a fairly good chance that tax return filings could be delayed in order to allow the IRS to update their computer systems. This doesn’t mean we can’t prepare your tax return. We can still prepare the returns. It just means we may have to wait a few weeks to actually transmit the return for electronic filing.

Kam Wiese, CPA
Kluge and Wiese, LLP
620 N. Hwy 6, PO Box 500
Gretna, NE 68028-0500
All rights reserved.