Posts by Tiffany Crawford, JD:
Recently the Internal Revenue Service (IRS) announced that due to the 16-day government shutdown, they will begin processing tax returns one- to two-weeks later than planned. The original start date was Jan. 21, 2014. With this delay, the tax season could begin no earlier than Jan. 28 or as late as Feb. 4. The IRS will not process paper returns until the official start date, even if they are received before the official start date. Read the rest of this entry “
Guess what? If you’re one of the 210,000 customers of the Ohio Bureau of Workers’ Compensation, then you could be getting a nice-size check. Thanks to Ohio Governor John Kasich and the BWC’s board, $1 billion will be returned to 210,000 Ohio employers in the form of a rebate. The board of the BWC unanimously approved the governor’s proposal two weeks ago. Read the rest of this entry “
Trying to plug yawning budget deficits, states are fighting a never ending battle for revenue. One common weapon in this battle: the increased enforcement of tax laws. Areas that were overlooked in the past now face heightened scrutiny. One area under the microscope: analyzing individuals’ domiciles. The purpose of this analysis: to find more people to tax. Read the rest of this entry “
If your business has paid at least $600 in professional services or other payments in 2011, you may be subject to a new 1099 reporting requirement as you begin to file your 2011 taxes. Read the rest of this entry “
The IRS recently held a webinar to explain its reporting requirements for healthcare coverage on employees’ W2’s for the 2011 tax year. We’ve provided a summary of the webinar below for those of you who missed it. Read the rest of this entry “
Late in the year last year, Congress extended several tax law provisions but only for a short period of time. Below are items that may expire at the end of this year if no action is taken by Congress. Read the rest of this entry “
We recently reported that Michigan is changing their tax structure effective January 1, 2012. In a nutshell, Michigan is replacing the Michigan Business Tax (MBT) with a Corporate Income Tax (CIT). Changes coming with the new CIT include a 6 percent tax imposed on C corporations only, making Michigan’s corporate income tax rate the lowest in the Midwest. Read the rest of this entry “
State and federal governments have made a number of tax incentives and credits available to employers in 2011 to help stimulate the stagnating economy. In many cases, your company may not see the tax benefit until it files its 2011 taxes, but this delayed benefit should not stop you from considering them. Read the rest of this entry “
If you converted a traditional IRA to a Roth IRA account last year, you may be facing an account that is worth much less than when you converted it. But you might also be facing a tax bill on value you no longer have. You do have an option, but only if you act quickly – reverse your 2010 Roth conversion.
If you converted your traditional IRA to a Roth IRA last year, the transaction triggered a taxable distribution from the traditional IRA, followed by a contribution to your Roth account. That tax will be based on the value of the traditional IRA on its conversion date. That means if your account is worth less now, you will owe taxes on money that no longer exists.
How to Reverse Your Roth IRA
Thankfully, the Roth conversion regulations allowed for the ability to reverse the conversion – but only if you do so before October 17. This involves completing the proper paperwork with your IRA custodian or trustee. When properly filed, the IRS considers your account as being “recharacterized” from a Roth account back to traditional IRA status. It’s as if the conversion never happened, and your tax liability disappears.
You’ll need to amend your 2010 tax return to allow for the reversal, or adjust your 2010 return if you have filed for an extension. Your reversal of the Roth conversion this year will also trigger some additional documentation requirements for your 2011 tax return.
Reconverting to Roth
Now that you’ve lessened your tax liability on phantom income that vanished due to the market’s versatility, you might consider using the down market to your advantage. You can reconvert your now traditional IRA back to a Roth – and pay less tax on it than you would have paid last year. You must wait 30 days after the reversal to reconvert it. Reconverting your traditional IRA account to a Roth can make sense if you expect your assets to appreciate quickly.
Your tax professional can assist you in amending your 2010 tax return or adjusting your extended 2010 return. He or she can also walk you through the reporting process that will be required should you decide to reconvert your IRA.
With more Ohio taxpayers now filing state returns electronically, the Ohio Department of Taxation has closed seven regional taxpayer centers and will no longer mail its income tax booklets to taxpayers. Read the rest of this entry “