Statistics on IRS Audits-Fiscal Year 2011
Individuals The IRS audited one in eight individuals with incomes over $1 million in fiscal year (FY) 2011. While the overall audit coverage rate for individuals remained steady at just over one percent, the audit coverage rate for higher-income individuals experienced growth in FY 2011. The IRS selected 1,564,690 individual returns for examination in FY 2011 compared to 1,581,394 individual returns selected for examination in FY 2010. Although there was a slight decline in the number of individual returns selected for audit in FY 2011, the overall audit coverage rate remained at 1.
Read POSTHealth Care Legislation Update
The Affordable Health Care Act passed into law in 2010 had a number of provisions that impact taxes for both individuals and business. In the 18 months since the law was passed a number of these provisions have been altered, so we would like to take a minute to update where items currently stand.. Small Employer Health Credit Effective for 2010, employers with fewer than 25 full-time-equivalents can receive a credit of up to 35% of employee health insurance premiums paid through 2013, provided the employer covers more than 50% of the cost of the premiums.
Read POSTS Corporation Health Insurance Premiums
As the year comes to a close, we want to remind our S corporation clients to take the necessary steps to be eligible for the health insurance premiums paid deduction. This deduction for 2% or greater shareholder/employees is an important deduction but there are some rules that must be followed to insure its availability. Hopefully, these thoughts will assist you in preparing your year-end payroll returns. S corporations are subject to special rules regarding employee fringe benefits.
Read POSTDocumentation for Charitable Contributions
Yesterday I asked my daughter to name three things she learned during the day. She began with a statement about what makes plants appear green (from biology class) and followed that with some obscure fact from math class. It was her third statement, however, that caught my interest: “Always get the receipt!” As it turns out, she had fueled her car after school using her debit card and she forgot to request the gas receipt to print out.
Read POSTNew Cost Basis Reporting for Sales of Securities Set to Begin
Effective for tax year 2011, Form 1099-B issued by stock brokers is required to report the cost basis of certain securities sold during the year. Under the old rules Form 1099-B reported the gross sale proceeds for securities sold during the year. Beginning with the 2011 year Form 1099-B will also report the cost basis of securities sold during 2011 BUT only for stock purchased in 2011 and later. This means your 2011 Form 1099-B will report gross proceeds from securities sold during the year and will report cost basis for those that were purchased during 2011 and will not report cost basis for those purchased in prior years.
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