Schedule your tax appointment today.  Call or email our office to schedule your tax appointment for the preparation of your 2019 personal taxes or business taxes.  We can assist you with filing and preparing your taxes even if you cannot make it to out office.  Feel free to discuss with David C Egan, CPA, CGMA (Owner) about other methods of collection for your important tax documents.

Goldenthal & Suss Consulting, PC
David C Egan, CPA, CGMA (Owner)
4218 Amboy Rd
Staten Island, NY 10308

P.718-227-6035
C.917-599-7696
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If you were not in or expect to be in AMT (Alternative Minimum Tax) and your state allows prepayment of real estate taxes, then you may benefit form paying your 2018 real estate taxes prior to 1/1/18. Feel free to contact me for specifics anytime before 12/31/17. 718-227-6035 or 917-599-7696 David Egan CPA

StatenIsland CPA

New Form 1099-K

Business Accept Credit Card Payments?

To our Clients and Friends:

If your company has a business relationship with a “payment settlement entity” (e.g., an issuer of credit or debit cards; PayPal), you may soon be receiving something new in the mail: Federal Form 1099-K. Any payment settlement entity that processes over 200 transactions on your behalf in a calendar year that aggregates to over $20,000, must issue this form to you by January 31 of the following year. Thus, forms for 2011 must be distributed to you by January 31, 2012. The Internal Revenue Service will, of course, receive a copy.

The purpose of Form 1099-K is to enable the IRS to compare dollar amounts reported by the issuer with data reported by business entities on their annual tax returns. Thus, it will be prudent to compare the dollar amount shown on any form you may receive with your own business records to check accuracy and avoid unnecessary correspondences with the IRS.

Contact our Staten Island Office for more details.

David C Egan, CPA
Partner

718-227-6035

Important Facts about Dependents and Exemptions

Six Important Facts about Dependents and Exemptions

Even though each individual tax return is different, some tax rules affect every person who may have to file a federal income tax return. These rules include dependents and exemptions. The IRS has six important facts about dependents and exemptions that will help you file your 2011 tax return.
1. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,700 on your 2011 tax return.

2. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.

3. Exemptions for dependents. You generally can take an exemption for each of your dependents. A dependent is your qualifying child or qualifying relative. You must list the Social Security number of any dependent for whom you claim an exemption.

4. If someone else claims you as a dependent, you may still be required to file your own tax return. Whether you must file a return depends on several factors including the amount of your unearned, earned or gross income, your marital status and any special taxes you owe.

5. If you are a dependent, you may not claim an exemption. If someone else – such as your parent – claims you as a dependent, you may not claim your personal exemption on your own tax return.

6. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children.

For further information or clarification, feel free to contact my office at 718-227-6035

David C Egan, CPA
Partner

Tax Updates for 2011-2012

The most significant event affecting 2011 returns was the signing on Dec. 17. 2010, of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act), P.L. 111-312, which extended the ordinary income tax rates introduced by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), P.L. 107-16, and the capital gain tax rates introduced by the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), P.L. 108-27. The Tax Relief Act also extended a large number of other expired or expiring provisions.
Many of the tax provisions enacted in EGTRRA and JGTRRA had been set to expire after 2010. The Tax Relief Act amended EGTRRA and JGTRRA to postpone the sunset of the affected provisions until after 2012 and extended many other provisions to 2011 or 2012.

EXTENSION OF EGTRRA AND JGTRRA PROVISIONS

Tax rates. EGTRRA introduced a 10% tax bracket below the 15% bracket for individuals and reduced the other tax brackets to 25%, 28%, 33% and 35%. Those changes were scheduled to sunset after 2010 so that in 2011 the 10% rate would disappear (with income in that bracket reverting to the 15% bracket) and the other rates would revert to 28%, 31%, 36% and 39.6%, respectively. With the Tax Relief Act’s postponement of the EGTRRA sunset, those rates are scheduled to continue through 2012.
Capital gains. In 2003, JGTRRA also lowered the capital gain tax rate to 15% (0% for taxpayers in the 10% and 15% ordinary income tax brackets). These rate changes also had been scheduled to expire after 2010. The Tax Relief Act’s postponement of JGTRRA’s sunset continues the lowered capital gain tax rate through 2012.
Itemized deductions and personal exemptions. The Tax Relief Act also extended EGTRRA’s repeal of the itemized deduction phaseout and the personal exemption phaseout for two years through 2012.

PAYROLL TAX REDUCTION

For 2011 only, the Tax Relief Act also reduced the rate for the Social Security portion of payroll taxes to 10.4% by reducing the employee rate from 6.2% to 4.2% (the employer’s portion remained at 6.2%). The payroll tax reduction replaced the former making work pay credit, which expired at the end of 2010. However, while the making work pay credit was phased out for higher-income taxpayers, the payroll tax reduction applied to all workers who paid payroll taxes, regardless of income level, and should be reflected in box 4 on the taxpayer’s 2011 Form W-2, Wage and Tax Statement.

AMT PROVISIONS

The Tax Relief Act increased the alternative minimum tax (AMT) exemption amounts for 2010 and 2011 (also known as the AMT patch). For 2011, the amounts are $48,450 for unmarried individuals; $74,450 for married individuals filing jointly; and $37,225 for married individuals filing separately.
In addition, the Tax Relief Act extended through 2012 the 0% and 15% capital gain rates for the AMT; the AMT offset of the child tax credit; and the 7% AMT preference for excluded gain on the disposition of qualified small business stock. It also extended the offset of nonrefundable personal credits against the AMT, but only through 2011.

EXTENSION OF EXPIRED INDIVIDUAL PROVISIONS

The Tax Relief Act extended a variety of temporary individual tax provisions that had expired at the end of 2009 or were scheduled to expire at the end of 2010. They include tax credits, deductions and various tax incentives.
All of the following were extended for two years through 2012:
Marriage penalty relief (the increased standard deduction and expanded 15% bracket for married taxpayers filing jointly);
The $1,000 child tax credit amount (previously scheduled to revert to $500 after 2010) and the expanded refundability of the credit;
The increased starting and ending points for the earned income credit and the increase in the credit amount for families with three or more qualifying children;
The liberalized child and dependent care credit rules (allowing the credit to be calculated based on up to $3,000 of expenses for one dependent or up to $6,000 for more than one);
The American opportunity tax credit;
The higher contribution amount and other EGTRRA changes to Coverdell education savings accounts;
The enhanced rules for student loan deductions introduced by EGTRRA;
The exclusion for employer-provided educational assistance (Sec. 127); and
The exclusion for National Health Services Corps and Armed Forces Health Professions Scholarships (Sec. 117(c)(2)).
The following provisions were extended for one year through 2011:
The treatment of mortgage insurance premiums as interest (Sec. 163(h)(3)(E));
The parity for exclusion from income for employer-provided mass transit passes and parking benefits (Sec. 132);
The allowance for tax-free distributions from individual retirement plans for charitable purposes (Sec. 408(d)(8));
The temporary 100% exclusion of gain from the sale of certain small business stock under Sec. 1202, enacted by the Small Business Jobs Act of 2010, P.L. 111-240;
The deduction for tuition and related expenses (Sec. 222);
The state and local sales tax deduction (Sec. 164);
The deduction for elementary and secondary school teachers (Sec. 62(a)(2)(D));
The nonbusiness energy property credit (under the rules in effect before the American Recovery and Reinvestment Act of 2009, P.L. 111-5) (Sec. 25C);
The credit for first-time Washington, D.C., homebuyers (Sec. 1400C); and
The special rules for qualified conservation contributions by individuals (Sec. 170(b)(1)(E)).

HEALTH CARE TAX PROVISIONS

Although most of its major provisions will take effect in subsequent years, the health care reform legislation passed in 2010 contained some provisions that were effective in 2011.
Employees may see some new information on their Forms W-2 for 2011. The Patient Protection and Affordable Care Act (PPACA), P.L. 111-148, requires employers to disclose on each employee’s annual Form W-2 the value of the employee’s health insurance coverage sponsored by the employer. This provision was originally mandatory for tax years beginning after Dec. 31, 2010; however, in Notice 2010-69, the IRS announced that employers will not be required to report the cost of employer- sponsored coverage on W-2s issued for 2011, due to the difficulty in preparing payroll systems for the requirement. However, employers have the option to report such costs in 2011, so some employees may see this information. It will appear in box 12 of the W-2, with a code DD. This reporting is strictly informational; the amount reported will not affect the individual’s tax liability.
Over-the-counter medications. Under the PPACA, amounts paid or incurred after Dec. 31, 2010, for medications obtained  without a prescription (except for insulin) are no longer reimbursable from health savings accounts (HSAs), Archer medical savings accounts (MSAs), health FSAs or health reimbursement arrangements.
Tax on HSA distributions. The additional tax on distributions from an HSA or an Archer MSA that are not used for qualified medical expenses was increased to 20% of the disbursed amount, effective for disbursements made during tax years starting after Dec. 31, 2010. (Under prior law, the tax was 10% of the disbursed amount for HSAs and 15% for Archer MSAs.)
SIMPLE cafeteria plans. Starting in 2011, small businesses could start offering SIMPLE cafeteria plans. Under the provision, an eligible small employer is provided with a safe harbor from the nondiscrimination requirements for cafeteria plans as well as from the nondiscrimination requirements for specified qualified benefits offered under a cafeteria plan, including group term life insurance, benefits under a self-insured medical expense reimbursement plan and benefits under a dependent care assistance program. Under the safe harbor, a cafeteria plan and the specified qualified benefits are treated as meeting the specified nondiscrimination rules if the cafeteria plan satisfies minimum eligibility and participation requirements and minimum contribution requirements.

BUSINESS PROVISIONS

Self-employment. The self-employment tax rate for 2011 dropped from 15.3% to 13.3%, reflecting the one-year cut in the Social Security tax also applicable to employees. However, taxpayers taking the above-the-line deduction for one-half of self-employment tax can still claim the same 7.65% amount as in 2010—making the deduction equal to 57.51% of self-employment tax for 2011. However, a provision that for 2010 allowed self-employed individuals to deduct health insurance premiums from self-employment income for purposes of determining self-employment tax (Sec. 162(l)(4)) was not extended for 2011.
Depreciation. Property acquired and placed in service between Sept. 9, 2010, and Dec. 31, 2011, may be eligible for 100% depreciation.
Work opportunity tax credit. Employers who hire certain military veterans, young people and members of other targeted groups by Dec. 31, 2011, may claim a credit based on the employee’s wages (Sec. 51).

NEW INFORMATION REPORTING PROVISIONS

Stock basis reporting. Individual taxpayers should also see more information on Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, which has been expanded to include the cost or other basis of stock and mutual fund shares sold or exchanged during the year. Stockbrokers and mutual fund companies will use Form 1099-B to report this information at year-end. They will also use the expanded form to report whether gain or loss realized on these transactions qualifies as long-term or short-term gain or loss. The payer is required to file the expanded Form 1099-B with the IRS by Feb. 28, 2012 (or April 2, 2012, if the payer files electronically) and provide it to investors by Feb. 15, 2012. Box 3 will show the cost or other basis of securities sold.
Credit card transactions. Beginning with calendar year 2011, payment settlement entities for traditional and online merchants will be required to report to a payee, as well as to the IRS, the gross amount of the payee’s reportable payment transactions within a calendar year. The payee is the party that accepts a payment card as payment or establishes an account with a third-party settlement organization to settle transactions. In a payment card transaction, the payee is generally the merchant or seller. This provision was enacted as Sec. 6050W by the Housing and Economic Recovery Act of 2008, P.L. 110-289, but became effective only in 2011. These payments are reported on Form 1099-K, Merchant Card and Third Party Network Payments, which may be furnished electronically.
The IRS in Notice 2011-89 provided transitional relief for 2012 from penalties under Secs. 6721 and 6722 for Forms 1099-K that are incorrect or incomplete, as long as the payer makes a good-faith effort to file and issue them correctly. The IRS also postponed until 2013 backup withholding with respect to amounts reportable under Sec. 6050W (Notice 2011-88). Form 1040, schedules C and E for 2011 tax years includes a line for payee taxpayers to report amounts reported to them on Form 1099-K, but the schedules direct taxpayers to enter a zero on the line.
Basis of inherited property. While most commentary and guidance has focused on the changes in estate and gift taxes for 2010 and 2011 as they relate to gift and estate returns, CPA practitioners may see effects of the 2010 modified carryover basis election on capital gains for 2011 reported by inheritors of the estates of 2010 decedents that made the election. Under these rules, the heirs receive inherited property with a basis equal to the lesser of the decedent’s basis or the property’s fair market value (FMV) as of the date of death (Sec. 1022(a)), plus any basis increase (up to the FMV of the property at the decedent’s date of death) allocated to the property by the executor of the estate.
The maximum amount of basis increase that the executor can allocate among all of the decedent’s assets is $1.3 million ($60,000 for estates of nonresidents who were not citizens), plus certain losses and loss carryovers of the decedent. Property transferred outright to the decedent’s spouse and qualified terminable interest property is eligible for an additional $3 million of basis increase. If the executor has made the Sec. 1022 election, the heir should receive from the estate a Form 8939, Schedule A, containing information about the property’s basis, date acquired, whether any gain on its sale would be ordinary, the amount of basis increase allocated to it and its FMV on the decedent’s date of death.
Individuals who inherited property from 2010 decedents may have already disposed of it before the estate made the carryover basis election and assumed that their basis was the FMV at the time of death. The estate’s subsequent election to apply the modified carryover basis rules may result in such individuals’ owing capital gain tax, due to the now lower basis of the property. The IRS has said that, in such cases, it will presume the recipient’s reasonable cause and good faith for any increase in the recipient’s tax liability due to the application of Sec. 1022 and will not impose failure-to-pay or accuracy-related penalties (Notice 2011-76). The IRS advises affected taxpayers to write at the top of an amended return “IR Notice 2011-76” to obtain the relief.

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Looking Ahead to the 2012 Tax Year
The IRS made inflation adjustments to the income tax tables and many tax credits and other items for tax years beginning in 2012 in Rev. Proc. 2011-52.
Separately, the IRS announced the 2012 contribution limits and other figures for pension plans and other retirement-related items (IR-2011-103).
The increases are greater than in the previous two years, when inflation was lower.
Besides revised income tax tables, the new revenue procedure included updated amounts for various items such as the personal exemption (which increases from $3,700 to $3,800) and standard deduction. The revenue procedure also gave new figures for the child tax credit, American opportunity and lifetime learning credits and the earned income tax credit—40 items in all.
The $13,000 annual gift exclusion is unchanged for 2012, although the estate and gift lifetime exclusion for decedents dying during 2012 goes up from $5 million to $5.12 million.
The elective deferral (contribution) limit for employees who participate in section 401(k), 403(b) or 457(b) plans and the federal government’s Thrift Savings Plan increases from $16,500 to $17,000. The catch-up contribution limit under those plans for those age 50 and over is unchanged at $5,500.
The Social Security Administration announced that the Social Security wage base for 2012 is $110,100 (up from $106,800 in 2011).

Charitable Giving Tips

If you make a donation to a charity this year, you may be able to take a
deduction for it on your 2011 tax return. Here are the top nine things the IRS
wants every taxpayer to know before deducting charitable donations.

1. Make sure the organization qualifies Charitable contributions must be made to qualified
   organizations to be deductible. You can ask any organization whether it is
   a qualified organization or check IRS Publication 78, Cumulative List of
   Organizations. It is available online at the IRS.
2. You must itemize
   Charitable contributions are deductible only if you itemize deductions
   using Form 1040, Schedule A.
3. What you can deduct You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified organization. Special rules apply to several types of donated property, including clothing or household items, cars and boats.
4. When you receive something in return If your contribution entitles you to receive
   merchandise, goods, or services in return – such as admission to a charity
   banquet or sporting event – you can deduct only the amount that exceeds
   the fair market value of the benefit received.
5. Recordkeeping Keep good records of
   any contribution you make, regardless of the amount. For any cash
   contribution, you must maintain a record of the contribution, such as a
   cancelled check, bank or credit card statement, payroll deduction record
   or a written statement from the charity containing the date and amount of
   the contribution and the name of the organization.
6. Pledges and payments
   Only contributions actually made during the tax year are deductible. For
   example, if you pledged $500 in September but paid the charity only $200
   by Dec. 31, you can only deduct $200.
7. Donations made near the end of the year Include credit card charges and payments by check in the year you give them to the charity, even though you may not pay the
        credit card bill or have your bank account debited until the next year.
8. Large donations
   For any contribution of $250 or more, you need more than a bank record.
   You must have a written acknowledgment from the organization. It must
   include the amount of cash and say whether the organization provided any
   goods or services in exchange for the gift. If you donated property, the
   acknowledgment must include a description of the items and a good faith
   estimate of its value. For items valued at $500 or more you must complete
   a Form 8283, Noncash Charitable Contributions, and attach the form to your
   return. If you claim a deduction for a contribution of noncash property
   worth more than $5,000, you generally must obtain an appraisal and
   complete Section B of Form 8283 with your return.
9. Tax Exemption Revoked Approximately 275,000 organizations automatically lost
   their tax-exempt status recently because they did not file required annual
   reports for three consecutive years, as required by law. Donations made
   prior to an organization’s automatic revocation remain tax-deductible.
   Going forward, however, organizations that are on the auto-revocation list
   that do not receive reinstatement are no longer eligible to receive
   tax-deductible contributions.

For more information contact your local (Staten Island CPA) for more assistance.

Back-to-School Tips for Students and Parents Paying College Expenses

Back-to-School Tips for Students and Parents Paying College Expenses 

Whether you’re a recent graduate going to college for the first time or a returning student, it will soon be time to get to campus – and payment deadlines for tuition and other fees are not far behind. The Internal Revenue Service reminds students or parents paying such expenses to keep receipts and to be aware of some tax benefits that can help offset college costs.

Typically, these benefits apply to you, your spouse or a dependent for whom you claim an exemption on your tax return.

1. American Opportunity Credit  This credit, originally created under the American Recovery and Reinvestment Act, has been extended for an additional two years – 2011 and 2012. The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education. Forty percent of this credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes. Qualified expenses include tuition and fees, course related books, supplies and equipment. The full credit is generally available to eligible taxpayers whose modified adjusted gross income is below $80,000 ($160,000 for married couples filing a joint return).
2. Lifetime Learning Credit  In 2011, you may be able to claim a Lifetime Learning Credit of up to $2,000 for qualified education expenses paid for a student enrolled in eligible educational institutions. There is no limit on the number of years you can claim the Lifetime Learning Credit for an eligible student, but to claim the credit, your modified adjusted gross income must be below $60,000 ($120,000 if married filing jointly).
3. Tuition and Fees Deduction  This deduction can reduce the amount of your income subject to tax by up to $4,000 for 2011 even if you do not itemize your deductions. Generally, you can claim the tuition and fees deduction for qualified higher education expenses for an eligible student if your modified adjusted gross income is below $80,000 ($160,000 if married filing jointly).
4. Student loan interest deduction  Generally, personal interest you pay, other than certain mortgage interest, is not deductible. However, if your modified adjusted gross income is less than $75,000 ($150,000 if filing a joint return), you may be able to deduct interest paid on a student loan used for higher education during the year. It can reduce the amount of your income subject to tax by up to $2,500, even if you don’t itemize deductions.

For each student, you can choose to claim only one of the credits in a single tax year. However, if you pay college expenses for two or more students in the same year, you can choose to take credits on a per-student, per-year basis. You can claim the American Opportunity Credit for your sophomore daughter and the Lifetime Learning Credit for your senior son.

You cannot claim the tuition and fees deduction for the same student in the same year that you claim the American Opportunity Credit or the Lifetime Learning Credit. You must choose to either take the credit or the deduction and should consider which is more beneficial for you.

If you have any questions or concers, feel free to contact me at my office at 718-227-6035.
Goldenthal & Suss CPAs & Consultants, PC
David C Egan, CPA
Partner
465 Belfield Avenue
Staten Island, NY 10312

444 Madison Avenue
4 Fl
New York, NY 10022