IRS Update: Net Investment Income Tax for High Income Individuals

Beginning in 2013, a new 3.8% additional tax on net investment income will apply when a taxpayer's modified adjusted gross income exceeds the following thresholds:

• $250,000 for Married Filing Joint filers or Qualifying Widow(er)
• $125,000 for Married Filing Separate filers
• $200,000 for taxpayers that file Single or Head of Household

Modified adjusted gross income is defined as the taxpayer's adjusted gross income increased by the net amount of exempt foreign sourced income.

Investment income generally includes interest, dividends, capital gains, rental or royalty income, non-qualified annuities, income from businesses involved in trading financial instruments or commodities, and passive activity business income.

Click here to read the entire CrossLink Tax Update about the new Net Investment Income Tax.

Another tax season is behind us!

Another tax season is behind us!

From everyone at CrossLink, we would like to thank you for another successful tax season! Please make sure to follow us throughout the off-season for the most current CrossLink and tax industry updates in preparation for the 2014 Tax Season.

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IRS Update: Additional Medicare Tax for High Income Taxpayers

Beginning in 2013, the additional Medicare tax will apply to individuals with wage income, other compensation, and/or self-employment income that exceed the following threshold amounts:

• $250,000 for Married Filing Jointly
• $125,000 for Married Filing Separately
• $200,000 for taxpayers that file Single, Head of Household, or Qualifying Widow(er).

The additional Medicare tax is calculated as 0.9% of the total of wages, other compensation, and self-employment income that is in excess of the taxpayer's threshold amount.

For self-employed taxpayers, the Medicare portion of their self-employment tax will be calculated as follows:

• Net self-employment income up to the taxpayer's threshold amount will be . . . Read more
• Amount over the threshold amount will be . . . Read more

Click here to read the entire CrossLink Tax Update about the additional Medicare tax for high income taxpayers.

3-Month Filing & Payment Extension Announced by IRS After Boston Marathon Bombings

"WASHINGTON — The Internal Revenue Service today announced a three-month tax filing and payment extension to Boston area taxpayers and others affected by Monday’s explosions.

This relief applies to all individual taxpayers who live in Suffolk County, Mass., including the city of Boston. It also includes victims, their families, first responders, others impacted by this tragedy who live outside Suffolk County and taxpayers whose tax preparers were adversely affected.

“Our hearts go out to the people affected by this tragic event,” said IRS Acting Commissioner Steven T. Miller. “We want victims and others affected by this terrible tragedy to have the time they need to finish their individual tax returns.”

Under the relief announced today, the IRS will issue a notice giving eligible taxpayers until July 15, 2013, to file their 2012 returns and pay any taxes normally due April 15. No filing and payment penalties will be due as long as returns are filed and payments are made by July 15, 2013. By law, interest, currently at the annual rate of 3 percent compounded daily, will still apply to any payments made after the April deadline.

The IRS will automatically provide this extension to anyone living in Suffolk County. If you live in Suffolk County, no further action is necessary by taxpayers to obtain this relief. However, eligible taxpayers living outside Suffolk County can claim this relief by calling 1-866-562-5227 starting Tuesday, April 23, and identifying themselves to the IRS before filing a return or making a payment. Eligible taxpayers who receive penalty notices from the IRS can also call this number to have these penalties abated.

Eligible taxpayers who need more time to file their returns may receive an additional extension to Oct. 15, 2013, by filing Form 4868 by July 15, 2013.

Taxpayers with questions unrelated to the Boston tragedy should visit IRS.gov, or contact the regular IRS toll-free number at 1-800-829-1040."

(Source: IRS News Release IR-2013-43 "IRS Announces Three-Month Filing, Payment Extension Following Boston Marathon Explosions")

IRS Update: New IRS Tool to Check Status of Federal Amended Return

Taxpayers now have a way to find the status of their Form 1040X (Amended Tax Return) that they filed for the current year or three prior years via the IRS website. Learn more

They may do this by using the new IRS look-up tool “Where’s My Amended Return?”. Once they have mailed their amended return to the IRS, their status will be available in three weeks.

Click here to read the entire CrossLink Tax Update about the new IRS tool for checking the status of Federal Amended Returns.