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February 2013 tax compliance calendar

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of February 2013.

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FAQ: What are above-the-line deductions?

An above-the-line deduction is an adjustment to income (deduction) that can be taken regardless of whether the individual taxpayer itemizes deductions. The adjustment reduces the taxpayer’s adjusted gross income (AGI). These adjustments are also sometimes called deductions from gross income, as opposed to itemized deductions that are deducted from AGI. An above-the-line deduction is taken out of income “above” the line on the tax form on which adjusted gross income is reported.

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How Do I? Compute the new 20 percent net capital gain rate under the new tax law

Beginning in 2013, the capital gains rates, as amended by the American Taxpayer Relief Act of 2012, are as follows for individuals:

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New IRS guidance on health care employer mandate looks to 2014 start date

Under the new health care law, starting in 2014, “large” employers with more than 50 full-time employees will be subject to stiff monetary penalties if they do not provide affordable and minimum essential health coverage. With less than eleven months before this “play or pay” provision is fully effective, the IRS continues to release critical details on what constitutes an “applicable large employer,” “full-time employee,” “affordable coverage,” and “minimum health coverage.” Most recently, the IRS issued proposed reliance regulations that provide employers with the most comprehensive explanation of their obligations and options to date.

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IRS introduces simplified method for claiming home office deduction

The IRS has announced a new optional safe harbor method, effective for tax years beginning on or after January 1, 2013, for individuals to determine the amount of their deductible home office expenses (IR-2013-5, Rev. Proc. 2013-13). Being hailed by many as a long-overdue simplification option, taxpayers may now elect to determine their home office deduction by simply multiplying a prescribed rate by the square footage of the portion of the taxpayer’s residence used for business purposes.

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ATRA delays start to 2013 filing season; requires careful planning for retroactive and prospective provisions

As the 2013 filing season gets underway, some taxpayers may experience delays in filing returns and others need to revisit their returns because of the passage of the American Taxpayer Relief Act (ATRA) on January 1, 2013. Late tax legislation always complicates tax planning and filing and 2013 is no exception. ATRA extended many popular tax incentives for individuals and businesses retroactively to January 1, 2012. This means that qualified taxpayers may claim them on their 2012 returns filed in 2013. ATRA also made many changes that take effect in 2013, which will require careful planning as this year unfolds.

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