Showing posts from 2014

Highway Use Tax Returns Due Soon

The IRS is reminding owners of highway motor vehicles weighing over 55,000 pounds that highway use tax returns and payment are due September 2, 2014.  The normal deadline for filing Form 2290 is August 31, but this year that date falls on a Sunday, and the following Monday is the Labor Day holiday.  Be sure to keep track of the mileage for such vehicles, because the IRS allows a suspension of tax on heavy vehicles used for 5,000 miles or less during the tax year.  You can read more about the highway use tax on the IRS website at

This blog is for informational purposes only.  It is not intended to be and should not be relied upon as legal advice.

Corporate Inversion Doesn’t Escape All U.S. Tax

A popular recent topic in politics has been “corporate inversion.” By claiming residence elsewhere, corporations are lowering their corporate income tax rates, but may not be escaping U.S. taxes altogether.  Corporations with U.S. employees may still liable for payroll taxes, there are industry-specific excise taxes that may be due, and states have their own various taxes, such as Texas’s franchise tax, which may also be imposed.  
This blog is for informational purposes only.  It is not intended to be and should not be relied upon as legal advice.

A Note About Gifts

Most people are familiar with the works of William Shakespeare.  One of his lesser-known writings is surprisingly found in his will.  In it, Shakespeare left to his wife his “second best bed.” Many have written over what this gift means about the relationship he had with his wife.  From an estate planning perspective, what it means is this: there is no right or wrong way to make gifts in your will.  Those items are yours and you are free to leave them as you wish.
Compare that to the will and estate plan of James Gandolfini, who passed away more recently.  When his will was made public, it contained more ordinary provisions (no talk of second-best bequests), but the distributions left his estate subject to estate tax, which added up to what was reported at approximately $30 million owed to the IRS. While he was free to leave the gifts as he chose, he could have done so in a way that did not result in a large tax due.
Taking these two public figures’ estates into account, the message …

IRS Announces Penalty Relief Pilot Program

The IRS announced last week that it will be offering a pilot program to allow small businesses with retirement plans to catch up on filing reporting documents without facing a penalty. The program allows plan administrators who did not file annual Form 5500 series returns to file those returns for current and prior years, and avoid the heavy penalties that could be assessed for the late returns.The program is scheduled to start in June 2014 and run for one year.More information is available in Revenue Procedure 2014-32.

This blog is for informational purposes only and should not be relied upon as legal advice.

Note on Taxing of Nonprofits

In a case recently upheld by the Fifth Circuit, the Tax Court found that amounts deposited into a “pastoral account” were not deductible as charitable contributions.  The Court focused on the pastors’ (a husband and wife) control over the funds in the account, noting that personal expenses were paid out of the account, and social security payments for the husband were directly deposited into the account.  The case (Gunkle v. Commissioner) involved the use of a “corporation sole” in what appeared to be an attempt to avoid certain taxes.  However, in the end, the taxpayers were assessed tax on the personal expenses paid out of the account, along with a 20% accuracy related penalty.  
This blog is for informational purposes only and should not be relied upon as legal advice.

Property Tax Time of Year

Texas doesn’t have a state income tax, but we do have property taxes.The state may mandate the tax, but it is the county that is in charge of assessing and collecting it.In many counties proposed assessments from the appraisal district are mailed to taxpayers around this time of year.If you disagree with the proposed assessment, ensure that you meet the deadline in your county to file a protest.And if you own a business, your county will also have a deadline for filing a rendition.Failure to meet this deadline could result in a penalty on top of the tax on business personal property.

This blog is for informational purposes only.It is not intended to be and should not be relied upon as legal advice.

Death and Taxes

“What is the tax going to be on my inheritance?” I get this question a lot in my probate practice.What many beneficiaries don’t realize is that inherited funds are generally not considered income and will not need to be claimed as income on personal tax returns. (There are some very limited exceptions that have to deal with the form the inherited funds take.)In talking with my probate clients, it seems that most of them have heard of the estate tax, and are concerned about that.Texas does not have a state estate tax.The current federal estate tax exclusion amount is over $5 million, which means if the total value of all the assets of the deceased is less than $5 million, no federal estate tax is due either.  Even some estates over the $5 million mark can avoid the estate tax with some careful estate planning.  Each case is different, and any concerns should be discussed with an attorney individually.
This post is for informational purposes only.  It is not intended to be and should not…

VERY Simple Tax Tips for 2013

In the midst of tax season, here are just a few very simple pointers for filing your 2013 returns:

1.Be honest.Taxes are signed and filed under penalties of perjury.
2.Make sure your preparer is qualified and a good fit for you.
3.Most of the numbers cannot be changed at this point, but you may still be able to contribute to an IRA for an additional deduction (subject to income limitations).
4.For businesses, keep track of actual vehicle expenses versus standard mileage.You can allocate business v. personal on a vehicle that is used for both.
5.If you have a business, make sure you only deduct expenses that are related to that business.And remember, if you are filing on a Form 1120 or 1065, those are due March15th, not April 15th.
6.There is a new option for calculating a home office expense in 2013:If you have a home office, you can calculate your deduction by multiplying the square footage of your home office by $5.00.
7.If you owe a lot on your return, consider making adjustments to your …