Monday, March 11, 2013

Tax Planning for Business: 10 Section 1031 Exchange Facts You Need to Know

Diane Gilabert writes: Section 1031 exchanges are a powerful tax planning tool. But watch out: they are full of tricks and traps. The basics of a like-kind exchange are straightforward, but very few are structured as simultaneous swaps of one property for another.   Here are 10 facts about section 1031 exchanges that you need to know.


  1. Section 1031 doesn’t only apply to real estate.
Example: Larry exchanges a truck used in his delivery business for a new truck. The dealer gives Larry a $2,000 trade-in allowance for the old truck. The old truck is fully depreciated. The transaction qualifies as a like-kind exchange and no gain is recognized. The tax basis of the new truck is reduced by the $2,000 trade-in allowance applied.
2. Section 1031 is not elective
It is difficult to structure a transaction so that it avoids section 1031. Check out Revenue Ruling 61-119. The taxpayer entered into separate contracts for the sale of used business equipment and the purchase of new equipment, but the IRS ruled the transactions were related and treated them as one.
Unlike the installment sale rules, there is no election out of section 1031.
3. Section 1031 applies to gain or loss
Example: Bernie exchanges a truck used in his delivery business for a new truck. The dealer gives Bernie $2,000 trade-in allowance for the old truck. The old truck has an adjusted tax basis of $3,000. The transaction qualifies as a like-kind exchange, and no loss is recognized. The tax basis of the new truck is increased by the $1,000 loss that was not recognized on the trade in.
4. Section 1031 need not apply to both parties
Example: Jack owns a residential rental property that he wants to exchange for one with better cash flow. Jill owns a personal residence that she wants to sell in order to downsize to a condo. Jack finds a buyer for his rental and uses a qualified intermediary. He identifies Jill’s home as his replacement property within the required 45 day period, and the transaction closes within the required 180 days. The transaction qualifies as a section 1031 exchange with respect to Jack: any gain or loss is deferred. For Jill, the transaction is the sale of a personal residence, so section 1031 will not apply.
5. The 2 year holding period applies to both parties in a related party exchange
Section 1031(f) requires that if an exchange occurs with related parties, the property must be retained for at least 2 years from the date of the exchange. Otherwise any gain or loss on the original exchange is recognized. The requirement to hold property for 2 years applies to both parties involved with the exchange.
6. Section 1031 can apply even if the replacement property is acquired before disposition of the property being relinquished
The concept of a reverse exchange was controversial for many years, but the IRS finally acquiesced to it and issued Rev. Proc. 2000-37 with safe harbor requirements.
7. The basis rules of section 1031 can produce unexpected results
Example: Dan exchanges unimproved real estate (basis of $15,000 and a fair market value of $30,000) for an apartment building owned by George (land with a fair market value of $10,000 and building of $20,000). The property acquired takes the $15,000 basis of the property transferred, allocated on the basis of their relative fair market values on the date of the exchange. Therefore, the basis allocated to the land is $5,000 ($10,000/$30,000 x $15,000) and the basis allocated to the building is $10,000 ($20,000/$30,000 x $15,000). In this case, Dan converted nondepreciable basis to largely depreciable basis. George lost all of his depreciable basis and no longer has depreciation deductions.
8. Exchanging property with potential section 1245 recapture does not automatically result in recognized gain (unlike an installment sale).
Example: Mindy exchanges a copier for another copier in a transaction that qualifies under section 1031(a).  Both copiers are 1245 property. No section 1245 recapture is triggered because Mindy did not receive any non-1245 property.
If non section 1245 property is received in a transaction with section 1245 recapture property, some gain due to recapture may apply. Refer to rules described in Reg. 1.1245-4(d)(4).
9. Section 1031 exchanges must be reported even if no gain or loss is recognized.
An exchange is reported as a disposition on either Form 4797 or Schedule D,  whichever applies, and also onForm 8824. Form 8824 requires descriptions of the property relinquished and received, identification of any related person who is a party to the exchange, and calculations of realized gain, recognized gain, and the basis of like-kind property received.
10. Electing out of partnership treatment under section 761(a) does not necessarily mean an exchange involving property owned by the partnership will otherwise qualify under section 1031(a).
Section 1031(a)(2)(D) contains an exception that an exchange of  partnership interests cannot qualify as a like kind exchange under section 1031(a). However, an amendment was added in 1990 to recognize partnerships with a valid election under section 761(a) as treating the partners as separately owning an interest in each asset for purposes of section 1031.
However, the IRS has been strict in applying this exception and has challenged the validity of section 761 elections in certain situations.
Posted on 11:08 AM | Categories:

Taking advantage of Miscellaneous tax deductions

Kay Bell the TaxGirl  for Bankrate.com writes:  Every tax season, frantic filers search for ways to reduce the checks they must write to Uncle Sam. A proven tax strategy is deducting as much as possible.  But sometimes, technically deductible expenses are wasted because they don't meet other Internal Revenue Service rules. This is often the case for most of the miscellaneous deductions found onSchedule A.
The roadblock preventing the write-off of these assorted expenses is the requirement that they total more than 2 percent of the taxpayer's adjusted gross income, or AGI. That means a taxpayer with $50,000 in AGI must come up with more than $1,000 in miscellaneous deductions before they do him or her any tax good. Even then, just the amount over $1,000 is deductible. So the 50-grand filer with $1,750 in tax-allowable miscellaneous expenses can only deduct $750, not the full $1,750.
While the 2 percent limit is tough for many filers to reach, it's not impossible. You just need to know exactly what the IRS considers as allowable miscellaneous deductions. The expenses fall into three general categories: unreimbursed employee expenses, tax preparation fees and "other" expenses.

Unreimbursed employee expenses

Remember that copier toner you bought that Saturday you had to work and the office machine ran dry? What about that fee you paid to become a notary public, a designation requested by your boss to speed up the flow of official documents? If you never got reimbursed for these costs, they could help reduce your personal tax bill as a miscellaneous deduction.
The IRS says you can deduct these expenses you paid out of your own pocket as long as they were required to do your job as an employee and were "ordinary and necessary" to your business or trade. An expense is ordinary if it is common and accepted in your type of business; it's necessary if it is appropriate and helpful to you in doing your job.
Because you have that percentage target to meet, be thorough here. Most taxpayers know to count the price of professional journal subscriptions and business-related meals and entertainment, but other items the IRS says you can deduct are the costs of work-related classes, legal fees and licenses. Don't overlook the price of job-required uniforms that you bought (and that aren't suitable as general attire), as well as amounts you paid for employer-required medical examinations. Even the fee to obtain the passport you needed for that overseas business trip is deductible here.
Certain home-office expenses also might count, as long as the residential workspace is for the convenience of your employer and not just to save you some commuting time. And don't forget about depreciation on personal computers you use for work. These, too, must be for your boss's convenience and required as a condition of your employment.
What if you've had it with your job and all its ancillary costs? You can deduct as miscellaneous expenses the amounts you spent looking for other employment in the same field.
Some of these expenses require you to fill out an additional tax form, schedule or work sheet. But when you get the final amount that you can deduct, report it on line 21 of Schedule A.

Tax-preparation fees

If collecting all your potential work-related deductions prompted you to seek tax help, then the IRS has a tax break for you here. And you don't have to hire a CPA to get this deduction.
You can deduct the cost of tax-preparation software, tax publications and even costs for associated tax-filing duties, such as copying your returns or paying for return-receipt postage or overnight delivery when you mail them.
If you choose electronic filing, any fee you paid for that service is deductible here. The IRS now even lets you deduct the convenience fee you were charged when you paid your e-filed taxes by credit card.
Just remember, you deduct your tax-preparation expenses for the tax year in which you paid them, not the tax year for which you are filing. So on your 2012 return, you count the tax-related costs you incurred last year to prepare your 2011 taxes. Any expenses you fork over now to complete your current return will count when you file your 2013 forms next year.
Once you've totaled your tax-prep costs, enter them on line 22 of Schedule A.

Other miscellaneous deductions

The final 2 percent deduction category is "other" expenses. For most taxpayers, these are costs to produce or collect income, such as investment-related fees, or to manage or maintain property that provides you with some extra earnings.
For the IRS to accept these deductions, the expenses must be "reasonably and closely related to" a taxpayer's income-producing efforts. Some common expenses that meet this requirement are clerical help in caring for investments, depreciation on home computers used to track and manage investments, and the fee for a safe-deposit box in which you keep investment data. If, however, your bank box holds only jewelry and other personal items, or even tax-exempt securities, the box rental fee is not deductible.
You also can write off several investment-related fees that, while small, could add up. They include service charges on dividend reinvestment plans and trustee's fees you paid for your IRA. Just make sure your retirement account fee is billed separately rather than included as part of your account's general management costs, and that you pay it separately.
Even costs associated with a recreational activity could come into play. Take, for example, an amateur photographer who snaps shots of graduations or weddings for the neighbors and gets a few bucks in return. The shutterbug can deduct camera-related expenses as a miscellaneous expense as long as the amount isn't more than the payments he or she got. The IRS frowns on using hobby expenses to reduce taxes.
All allowable "other" miscellaneous deductions are entered on Schedule A's line 23. Then all three category amounts (lines 21, 22 and 23) are totaled. Unfortunately, because of the AGI percentage limit, that's not what you can deduct.

Maximizing miscellaneous deductions

Now you must take your AGI (from line 38 of your Form 1040), multiply it by 2 percent and enter the amount on line 26 of your Schedule A.
If that income percentage is more than your miscellaneous deductions total, you're out of tax-deduction luck. You can't claim any of the expenses. But if your fractional AGI amount is less, subtract it from your miscellaneous deductions total -- the remainder is what you can claim as an itemized deduction.
In addition to your Schedule A calculations, you might have to complete additional tax forms or work sheets to claim some of these miscellaneous expenses. You can find a complete list of the IRS-approved deductions (and those that aren't OK), as well as the other tax paperwork each might require in IRS Publication 529, Miscellaneous Deductions. But if the extra paper gets you over the 2-percent-of-AGI hurdle, the time spent is probably worth it.
And what if your miscellaneous efforts fell a bit short this filing season? Then set up a deduction bunching strategy now to guarantee that future sundry expenses aren't wasted. This is simply bunching, or gathering your expenses into one tax year, rather than spreading the costs over several. By doing so, you often can accumulate enough expenses to exceed the deduction threshold.
For example, renew your business subscriptions in December instead of January, or prepay your professional association dues early. This will help turn "nearly" deductible expenses one year into full-fledged tax breaks the next filing season.
The only downside of this plan is that it usually helps you out only every other year. When you push expenses into one year, you generally will find yourself short of the itemized deduction percentage requirement the next year. But getting the breaks on alternate tax filings is still better than missing out on them every year.
Posted on 8:31 AM | Categories:

TaxACT Review: Good Deal for Tough Taxes


Ted Needleman, NotebookReview  writes: It's been a difficult tax year for lots of folks, what with Hurricane Sandy and the "Fiscal Cliff." Yet regardless of these disruptions, it makes real sense to take a close look at the main software alternatives available to you if you're doing your own taxes. As we'll see in this review, the third in a series of three, TaxACT is noticeably less pricey than its competitors, TurboTax and H&R Block At Home, although it does contain some minor idiosyncracies. TaxACT's support options are different, too.
Overview
This tax year has been an unusual one. First, Hurricane Sandy wreaked havoc on much of the East Coast, and the storm left a terrible number of taxpayers without a place to live, much less to organize their records for return preparation.
On top of that, the "Fiscal Cliff" situation left the I.R.S. uncertain as to whether many of the forms and pieces of tax code would be changed, eliminated, or remain the same. Usually, the I.R.S. starts processing electronically filed returns in mid-January. This year, the start of the tax season was officially pushed off until January 30th.
While taxpayers got a two-week delay on starting to electronically submit their returns, the April 15th filing deadline (if you don't file for an automatic six-month extension to file) is still very much in place.
Which Software To Choose?
If you decide to prepare your own taxes, which product should you choose, and beyond that, which version? As with its major competitors, TurboTax and H&R Block at Home, 2nd Story Software, Inc.'s TaxACT is available in several editions and in online as well as CD or downloadable flavors. (For expanded views of the screenshots at right, please click on the images.)
For some taxpayers, the online Free edition of TaxACT will suffice, although you will have to pay for phone support. (Email support is free.) This version of TaxACT actually offers most of the same forms as the other editions, but there are limitations on how much income you can have in order to use it, Also, the Free edition also doesn't handle some more advanced tax situations such as calculating if you are better off filing separately or jointly if you're married, and it doesn't deal with non-cash charitable donations.
TaxACT: Less Pricey Than Its Competitors
If you're willing to spend money, TaxACT is noticeably less expensive than its competitors. Among the online versions for consumer use, the $9.95 Deluxe and $19.95 Ultimate Bundle editions of TaxACT can manage a more complex return than most taxpayers would feel comfortable doing without technological assistance. The more costly Ultimate flavor adds state tax return filing. (New York residents, however, get state tax filing for free.)
TaxACT's Windows-based PC software for preparing your returns is available on CD or for download. The software offers the same basic features as the three online editions, but aside from the Free version, it's a bit costlier: $12.95 for the Deluxe edition and $21.95 for the Ultimate edition.
If you want to be able to file up to four more federal returns (perhaps for family members), the prices go up by $7.00: to $19.95 for the Deluxe edition and $28.95 for the Ultimate edition. If you want to file a state tax electronically, this will cost you $14.95 with Deluxe, but one state is included with Ultimate. This does not include a filing fee for the state return, which is $7.95. (New York residents don't need to pay this fee.) 2nd Story also produces separate editions of TaxACT for businesses and for professional tax preparers.
Performance
I tested the Ultimate Bundle on CD, so if you use the online flavor, your installation experience might be different. The software installed easily, You just click on a button on the initial start-up screen to indicate which edition you want installed. Other than the Free edition, the software needs to be unlocked with a 10-number key included in the package.
The initial install finished in just a few minutes. Each time the application started, it checked for updates and downloads. It also installed those very quickly.
A (Mainly) Straightforward User Interface
As with its competitors, TaxACT allows you to use the application in either step-by-step handholding mode or forms view. Jump directly to the forms if you know precisely what needs to be filled out. You can switch back and forth between the two modes.
Also as with TurboTax and H&R Block at Home, TaxACT is organized into tabbed sections, each of which addresses components necessary to complete a return. Subsections of each major tab also provide additional differentiation in what information is required to complete them. So if you need to return to an area, you can do so without starting out at the beginning of a major section tab.
For example, the "Basic Info" tab contains subsections labeled Import, Personal Info, Dependents, Filing Status, and Estimated Payments. There's a "Jump To Topics" button on the right side of this section, so you can skip forward or return to a previous subsection.
Like the other major tax prep applications, TaxACT uses a vertical pane on the right side of the screen to display a fluctuating Balance Due or Refund as well as the Help facility.
TaxACT also provides video help on certain subjects as the return is prepared, and this feature can be turned off if it's not wanted or becomes intrusive.
Importing Past Returns Can Be Cumbersome
However, one area that I'm less than impressed with is TaxACT's import feature. TurboTax and H&R Block at Home are both able to import last year's data directly from the other vendors' files. TaxACT can perform this input only from its own files.
TaxACT, though, can import data from last year's return if you have stored this return in PDF format. Either that, or you can go back to the software that you used and generate the PDF. Finding out how to do this took a bit of investigating, but using the Help feature, I was directed to the File menu, which held an Import selection. It would have been nicer to be immediately directed to this function when asked whether I wanted to to import last year's data. In fact, it's not really evident that TaxACT has this capability as you walk through the Q&A process.
In actual operation, however, the QuickConvert utility lived up to its name, rapidly extracting appropriate data from last year's PDF and populating the appropriate fields in the new return accurately. If your return has a lot of different kinds of repetitive data, such as W-2s and 1099s as mine does, QuickConvert can be a real timesaver.
Filing for an Extension Is Clunky
TaxACT has one additional eccentricity that I think some taxpayers will find annoying. It's extremely common for a taxpayer to file for a six-month extension. Filing for the extension is free, and as long as you remit (or have withheld) the taxes that you estimate are due, there's no penalty for taking an additional six months to file. You are required to fill out and send form 4868. (Note: You might also need to file a different form with the state if you want an extension on filing your state return.)
TurboTAX and H&R Block present the option to file for an extension right at startup, as well as the option to file an amended return (Form 1040X). In TaxACT, on the other hand, the option to file for an extension is located under the Filing tab, where it's harder to find. While this makes sense on some levels, if you're accustomed to one of the other vendor's packages, you might wrongly assume that Form 4868 is not available in the software.
Consider the Support Options
TaxACT doesn't provide the level of phone support that TurboTax and H&R Block at Home do. It doesn't promise that you'll speak to a CPA or Enrolled Agent (TurboTax) or a "tax professional" (H&R Block), but only that you can talk to or email their support staff. If you anticipate your return being difficult to prepare, this can be a significant issue.
Yet on the other hand, TaxACT does offer "Audit Assist" within the software. This is really just a FAQ covering the most common areas that are audited and does not involve any humans in the process. However, TaxACT also supplies audit support as a separate $39.95 option provided through Tax Audit Defense, a separate company.
Since Tax Audit Defense promises to represent you in dealing with any federal or state audits (assuming you give them a power of attorney), this looks like a bargain to me, although I did not test it. A CPA or Enrolled Agent charges several times than that an hour to represent you in an audit. You can also sign up for this service if you're using another vendor's tax software, but not at this low price.
Conclusion
TaxACT produced an accurate return, and on the whole, it wasn't difficult to use. If you don't mind putting up with a few idiosyncracies, TaxACT can represent a good deal for you. If you're in a particularly tricky tax situation, though, you'll need to weigh a couple of other considerations. While TaxACT doesn't provide the same level of phone support as its rivals, it does give you a bargain on Tax Audit Defense.
Pros:
  • Great price
  • Easy to use, on the whole
  • Help videos available at intervals
Cons:
  • Filing for a six-month extension is clunky
  • Importing a previous return can be cumbersome

Individual Ratings: *

Software & Support 
Upgrade Capabilities 
Usability 
Design 
Performance 
Features 
Price/Value Rating 
Posted on 8:31 AM | Categories:

Can Filing Taxes Quarterly Save Money?

Tom Streissguth, Demand Media writes: The IRS requires the self-employed, and individuals with high non-wage income, to pay quarterly estimated taxes. The amount depends on what you estimate your tax liability to be for the year. Strictly speaking, this is not a tax filing. Instead, it's a deposit on your tax bill to the IRS. If you estimate the deposit accurately, and pay it on time, then you avoid IRS penalties, as well as the inconvenience of writing a big check to the agency when you file your return.


TAX BILLS

Estimated tax is a task for the self-employed, as well as people who earn a substantial amount from interest, dividends, rent, capital gains, alimony or prizes. The amount of tax you owe depends on how much you make. The date on which you pay taxes doesn't change the tax liability, and there is no savings on the tax bill, or change in the tax rates, for people who pay estimated taxes. On April 15, the tax for the previous year comes due in full, along with your tax return. If you pay late, you pay more.

UNDERPAYMENT AND PENALTIES

Estimated tax payments are due in April, June, September and January. They are just a less-frequent form of withholding. In both cases, you pay your tax bill as you earn money. If your estimated quarterly payment, or withholding, is too low, then you might pay interest -- which the IRS calls a penalty -- on the amount by which you underpaid. In 2012, this rate was fixed at 5 percent. The IRS provides a form for you to figure out the penalty on your return. If you prefer, you can let the agency calculate the penalty and send you a bill.

OTHER WAYS TO PAY

You can also save time and postage, and the dangers of a bounced check, by paying estimated taxes online. The IRS requires a valid debit or credit card, or an open bank account that can be used for a direct transfer. You can also carry this out by calling the IRS and providing the information over the phone; however, phone calls to the IRS can involve long hold times. You can also use one of several third-party vendors, including Official Payments Corporation, WorldPay and Link2Gov Corporation. They charge a fee for the service.

SELF-EMPLOYMENT TAXES

For the self-employed, estimated taxes include the amount owed for self-employment taxes. SE tax is for income you earn, on which you need to pay a full share of Social Security and Medicare tax. With a conventional paycheck, these "payroll" taxes are split 50/50 between employer and employee. Estimated tax payments provide no discount on payroll tax, or any change in the rate you'll pay on other income such as capital gains, gift or estate tax.
Posted on 8:30 AM | Categories:

What's the New Jersey "Use Tax"? [Explained]

This past week we had a couple of emailed inquires on the NJ Use Tax - so we shall explain the details of this tax.   If you were a New Jersey resident and you purchased items or services that were subject to New Jersey sales tax, you are liable for use that at the rate of 7% of the purchase price if sales tax has not been paid. If sales tax has been collected out of State, use tax is only due if the tax was paid at a rate less than 7%, based on the difference."
For example:
  • You purchased a computer for $1,500 from a seller located outside of New Jersey and no sales tax was collected. Your use tax liability to New Jersey on this item is $105 ($1,500 x .07 = $105).
  • On a trip to Maine you purchased an antique desk for $4,000 and paid Maine sales tax at the rate of 5%. The difference, $80 (2% of the purchase price), is due to New Jersey as use tax.
Individual taxpayers report and remit use tax by either completing and filing the Use Tax Return (Form ST-18) within 20 days after property is brought into New Jersey, or by reporting any use tax due on their yearly state return. The entry appears on Line 44 of NJ-1040.

If you owe use tax and are remitting it with Form NJ-1040, compute the amount of use tax due as follows:

STEP 1 - Items or services costing less than $1,000 each. If you know the amount of your purchases in this category, calculate the exact amount of use tax due by multiplying the amount of your purchases by 7%. OR, if you have incomplete or inaccurate receipts for your purchase, you may use the Estimated Use Tax Chart to estimate the amount of use tax due.

ESTIMATEAD USE TAX CHART (for Step 1 computation only)
If your NJ gross income is:Use Tax:
Up to $15,000$ 7
$15,001 - $30,000$22
$30,001-$50,000$32
$50,001-$75,000$42
$75,001-$100,000$53
$100,001-$150,000$67
$150,001-$200,000$85
$200,001 and over.0426% (.000426) of income, or $247, whichever is less
Note: Using the Estimated Use Tax Chart to determine the amount of use tax you report on Line 44 does not preclude the Division of Taxation from auditing your account. New Jersey does have access to records maintained by out-of-State businesses, and if additional tax is due, you may receive an assessment for the amount of use tax owed, plus applicable penalties and interest.

STEP 2 - Items or services costing $1,000 or more each. You must calculate the exact amount of use tax due on all purchases in this category.

STEP 3 - Total Use Tax Due. Add the amounts determined in Steps 1 and 2. Enter the result into the Use Tax screen on the program.
Posted on 8:30 AM | Categories:

New Jersey : Estate taxes workshops planned for April 2 in Scotch Plains and April 9 in Gillette


We support spreading the word on free knowledge & information, just be aware when you attend events like the one we're presenting, they are 'selling'.   Gail L. Abrams for NJ.com writes: Under the new Federal Tax Law the top Gift, Estate, and GST tax rates are set at 40% for gifts made and individuals dying in 2013 and thereafter. This top rate will apply to transfers exceeding the exemption amount now permanently set at $5,000,000.

However, before we all get too excited about a permanent Federal Estate Tax Law, we must all remember where we live. New Jersey is one of 17 states that has its very own estate tax and many people are unaware of how it affects them. While you may not owe Federal taxes (as most of us do not have estates in excess of $5,000,000) you will possibly owe New Jersey Transfer tax at death. New Jersey sets the estate exemption at only $675,000 and imposes a “Transfer Tax” on all assets in excess of the exemption amount per individual (married couples are not exempt from the NJ Transfer Tax). Many homes in New Jersey are worth at least $500,000 or more. If you add in your IRA’s, bank accounts, investments, life insurance policies and other assets, it is relatively easy to exceed the exemption amount.

If you believe you will reach the $675,000 exemption limit, you should consult an attorney who specializes in Estate Planning. Gail L. Abrams is an attorney in Watchung, who specializes in estate planning strategies and utilizes a tool known as a Discretionary Living Trust (unique to her firm) to minimize NJ Transfer tax. You can contact her office at 908-753-4155 to discuss your situation or email her a contactus@estateattorneynj.com.

A Discretionary Revocable Living Trust (also known as an “inter vivos trust” or a “credit shelter trust”) allows a married couple a choice to preserve at the death of the first spouse the New Jersey exemption of $675,000. The surviving spouse preserves the assets in a trust for the benefit of that surviving spouse during his or her lifetime with the remainder going to the heirs estate tax free after both spouses pass away. The surviving spouse chooses which assets to put into the trust he or she can use the assets and retain trustee control over those assets. A Revocable Living Trust is a private document and does not go through the Probate Court and is valid in every state. A Revocable Living Trust is an excellent tool to retain privacy, organize your assets, avoid multiple probate proceedings, if you have property outside of New Jersey and possibly even eliminate some or all of New Jersey Transfer Taxes.

The Law Offices of Gail L. Abrams offers free seminars on estate and financial planning including living trusts, wills, powers of attorney, IRA strategies, retirement planning and more.
To learn more, call 908-753-4156 or view website at estateattorneynj.com and make a reservation to attend one or more of these upcoming seminars: Lunch workshops all starting at 11 a.m. promptly. Reservations are required. Estate planning workshops:
— April 2, Grillestone, 2377 Route 22 West: Scotch Plains.
— April 9, Chimney Rock Inn, 342 Valley Road, Gillette.

Contact ExactCPA for 2nd opinion on any counsel or advice you receive.
Posted on 8:30 AM | Categories:

Five High-Tech Apps To Help at Tax Time

While there are few substitutes for a qualified tax professional, tech-savvy taxpayers can tap the power of some high-tech tools to help fill in your knowledge gaps and make the filing process simpler and less stressful. TurboTax SnapTax claims to do your taxes in 10 minutes or less, while Expensify allows you to simplify records by going digital.

Tax time is a chore for many Americans, particularly those who try to save a few bucks and file the paperwork on their own without any help. But thankfully there are a host of affordable products for tech-savvy taxpayers that can take some of the guesswork out of filing your taxes. And best of all, some of them are free. Granted, there are few substitutes for a qualified tax professional with a human touch. Often, the biggest problem for Americans is not even knowing what questions to ask regarding their taxes, and having a certified public accountant or other expert is difficult to match. However, numerous high-tech tools do a great job filling in your knowledge gaps and making the filing process simpler and less stressful.  Here are a few worth looking into:

TurboTax SnapTax
Available for iPhone and Android devices, SnapTax claims to do your taxes in 10 minutes or less. Sound too good to be true? Well, there are limitations: You can't own a home, you have to earn less than $100,000 ($120,000 if you file jointly) and you have to only have W-2, interest and unemployment income.  However, if you are one of the millions of Americans who don't have to itemize, then filing your taxes right from your smartphone could be very appealing. SnapTax lets you upload your W-2s simply by taking a picture of the form with your mobile device, then asks a few simple questions and you're all set. The program is free to download but charges $24.99 to e-file finished returns (state filing is included).

Expensify
In the old days people used to keep shoe boxes of records for qualified expenses. But Expensify allows you to simplify things by going digital.
This simple program can be downloaded to any mobile device with a camera and is a must-have for anyone bogged down with receipts.
Whether you're self-employed and taking a business trip or managing the local soup kitchen, Expensify allows you to take a picture of receipts and file them away for review. You can then sort by expense category, trips or other reports that you set up. The app is free and available on all smartphones.

Bloomberg BNA Quick Tax Reference
The Bloomberg BNA Quick Tax Reference app for smartphones won't file your returns for you, but it is a powerful resource if you have questions about any item in the tax code, no matter how small. Of course, the depth may only confuse you if you don't itemize your return. But for those who have multiple income streams and multiple deductions, this Bloomberg app is easy to navigate and has a wealth of info. The app is free and available on iPhone, Android and BlackBerry. It also already has 2013 tax info loaded up to inform your financial decisions for the current tax year.

IRS2Go
This mobile app doesn't allow for filing of your return but plugs you into the IRS so you can access your existing tax records on the go as well as check the status of your 2012 return after it's filed.  There's also easy access to tax tips, instructional videos and other educational stuff from the IRS if you're interested in that kind of thing.  The app is free and, according to the IRS Web site, irs.gov, should be updated with new features soon.

Ask A CPA
Confused about a specific part of your tax return, such as whether gains from selling an antique car are treated the same as capital gains from a stock investment? Well, thankfully, Ask A CPA has an archive of frequently asked tax questions and tips from certified public accountants to help you.
Best of all, if previously asked questions aren't good enough, you can ask your own questions via the app or locate a CPA in your area who is knowledgeable about your kind of situation.  The app is free, but there's no guarantee you'll get a response.  And keep in mind that the tips are commonly general in nature and not specifically tailored to you and the exact dollar amounts on your tax return.

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