SMEED CPA, Inc | 201 Sand Creek Road, Suite F | Brentwood, CA 94513 | Phone: 925-634-2344

       

 

 

Michael Uadiale, CPA

SMEED CPA, Inc.

 

Call our Testimonial Hotline & give us your feedback at:

 

800-609-9006 extension 3638

 


 

Other Articles

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Feature Articles

- Tax Changes for 2012: A Checklist
- Ensuring Financial Success for Your Business
- How to Get Paid on Time

Tax Tips

- Tax Brackets, Deductions, and Exemptions for 2012
- IRS Announces 2012 Standard Mileage Rates
- Receive a Faster Refund with Direct Deposit
- Filing Requirements for Dependents

Financial Tips

- Create a Financial Plan and Monitoring System
- Set Up an Effective Filing System
- Prepare for Taxes

 

 

 

    Tax Changes for 2012: A Checklist

 

Welcome 2012! As the new year rolls around, it's always a sure bet that there will be changes to the current tax law and 2012 is no different. From health savings accounts to retirement contributions here's a checklist of tax changes to help you plan the year ahead.


Individuals
The current tax rate structure ranging from 10% to 35% remains the same for 2012, but tax-bracket thresholds increase for each filing status. Standard deductions and the personal exemption have also been adjusted upward to reflect inflation. For details see Tax Brackets and Exemptions for 2012 below.

Alternate Minimum Tax (AMT)
Alternate Minimum Tax (AMT) limits decrease for all taxpayers at $33,750 for singles, $45,000 for married filing jointly, and $22,500 for married filing separately.

"Kiddie Tax"
For taxable years beginning in 2012, the amount that can be used to reduce the net unearned income reported on the child's return that is subject to the "kiddie tax," is $950. The same $950 amount is used to determine whether a parent may elect to include a child's gross income in the parent's gross income and to calculate the "kiddie tax". For example, one of the requirements for the parental election is that a child's gross income for 2012 must be more than $950 but less than $9,500.

For 2012, the net unearned income for a child under the age of 19 (or a full-time student under the age of 24) that is not subject to "kiddie tax" is $1,900, the same as 2011.

 

2012 REFERRAL PROGRAM for Current SMEED CPA Tax & Accounting Clients:

For the 2012 Tax Season, as always we would welcome any REFERRALS of friends, family, co-workers (even strangers) you send to us.  To make it worth your while we have provided some incentives for to send us as many people as possible.  Here's how it will work

  • If you send us at least 4 Referral (new) clients who bill at least $200 with us, you will receive an X-BOX. 

  • If you send us 5 or 6 Referral (new) clients who bill at least $200 with us, you will receive a 32-inch LED Television. 

  • If you send us 7 or more Referral (new) clients who bill at least $200 with us, you will receive an Apple I-Pad! 

If you have any questions feel free to call the office at 925-634-2344.  Thank you in advance for your help! 



Health Savings Accounts (HSAs)
Contributions to a Health Savings Account (HSA) are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. Medical expenses must not be reimbursable by insurance or other sources and do not qualify for the medical expense deduction on a federal income tax return.

A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance with the exception of insurance for accidents, disability, dental care, vision care, or long-term care.

For calendar year 2012, a qualifying HDHP must have a deductible of at least $1,200 for self-only coverage or $2,400 for family coverage (unchanged from 2011) and must limit annual out-of-pocket expenses of the beneficiary to $6,050 for self-only coverage (up $100 from 2011) and $12,100 for family coverage (up $200 from 2011).

Medical Savings Accounts (MSAs)
There are two types of Medical Savings Accounts (MSAs), the Archer MSA created to help self-employed individuals and employees of certain small employers and the Medicare Advantage MSA, which is actually an Archer MSA as well, and is designated by Medicare to be used solely to pay the qualified medical expenses of the account holder. To be eligible for a Medicare Advantage MSA, you must be enrolled in Medicare and both MSAs require that you are enrolled in a high deductible health plan (HDHP).

Self-only coverage. For taxable years beginning in 2012, the term "high deductible health plan" means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,100 (up $100 from 2011) and not more than $3,150 (up $150 from 2011), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,200 (up $150 from 2011).

Family coverage. For taxable years beginning in 2012, the term "high deductible health plan" means, for family coverage, a health plan that has an annual deductible that is not less than $4,200 (up $150 from 2011) and not more than $6,300 (up $250 from 2011), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $7,650 (up $250 from 2011).

 

Eligible Long-Term Care Premiums
Premiums for long-term care are treated the same as health care premiums and are deductible on your taxes subject to certain limitations. For individuals age 40 or less at the end of 2012, the limitation is $350. Persons over 40 but less than 50 can deduct $660. Those over age 50 but not more than 60 can deduct $1,310, while individuals over age 60 but younger than 70 can deduct $3,500. The maximum deduction $4,370 and applies to anyone over the age of 70.

Adoption Assistance Programs
For taxable years beginning in 2012, the amount that can be excluded from an employee's gross income for the adoption of a child with special needs is $12,650. In addition, the maximum amount that can be excluded from an employee's gross income for the amounts paid or expenses incurred by an employer for qualified adoption expenses furnished pursuant to an adoption assistance program for other adoptions by the employee is $12,650 (down from $13,360 in 2011).

The amount excludable from an employee's gross income begins to phase out under for taxpayers with modified adjusted gross income (MAGI) in excess of $189,710 and is completely phased out for taxpayers with modified adjusted gross income of $229,710 or more.

Taxpayers adopting children are eligible for both the adoption credit (see below) and the adoption assistance exclusion of adoption expenses paid for through an employer's adoption assistance plan. However, the same adoption expense cannot qualify for both the adoption credit and the adoption assistance exclusion.

Foreign Earned Income Exclusion
For taxable years beginning in 2012, the foreign earned income exclusion amount is $95,100, up from $92,900 in 2011.

Estate Tax
For an estate of any decedent dying during calendar year 2012, the basic exclusion amount is $5,120,000, up from $5,000,000 in 2011. Also, if the executor chooses to use the special use valuation method for qualified real property, the aggregate decrease in the value of the property resulting from the choice cannot exceed $1,040,000, up from $1,020,000 for 2011. The maximum tax rate remains at 35%.


Note that this is only a PARTIAL LIST and you can click here to read the rest of the article.  Please contact us if you need help understanding which deductions and tax credits you are entitled to. We are always available to assist you.

 

 

PLEASE NOTE: Asset allocation does not ensure a profit or protect against loss in declining markets?

 



Would You Give Me Your
Feedback & Testimonial on Our Hotline?

 

Hello its Michael Uadiale, CPA of SMEED CPA Inc.  Weve just installed a toll-free number that I would like for you to call and tell me how you think we are doing as your CPA firm.

 

Just dial 800-609-9006 extension 3638 and follow the instructions.  If weve done a good job please let me know.  And if we can improve on anything, please mention that too.

 


 

Help Us Be Found on Google!

 

Also as we expand our business, we find more and more people are using the Internet and Google to look for us by searching Brentwood accountant or Brentwood CPA.

 

When they do this we want to be FOUND on GOOGLE.  One way you can help us is to give us an ONLINE REVIEW on our Google Maps/Places listing --->

 

Just click here to go to our Google Listing for SMEED CPA.  Scroll down to the Review area.

 

It may say:  Been here? Rate and review

 

You will click on the Rate and review link and then log into Google, then give us a review!

 

You can choose between 1 and 5 STARS and write in what you think about the tax or accounting work we have done for you.

 

It's that simple.  Thank you in advance for your help and cooperation!

 


 

As always you can call our offices if you have any questions about these or any other accounting related issues, at 925-634-2344. 

 

Regards, Michael Uadiale, CPA

Managing Partner, SMEED CPA, Inc.

 
 

 

SMEED CPA, Inc | 201 Sand Creek Road, Suite F | Brentwood, CA 94513
The Next Frontier CPA Firm | www.SmeedCPA.com | info@smeedcpa.com
Phone: 925-634-2344 | Fax: 925-634-2346 | Cell: 925-207-6771