Intuit Offering Possible 14.94% Return Over the Next 29 Calendar Days / Why Intuit Shares Might Keep Rallying

Okay, we read everything about Intuit...including the latest on how the stock is trading. Mindful of that, as of today October 19, this is what some are saying about Intuit stock. MarketTamer writes: Intuit’s most recent trend suggests a bullish bias. One trading opportunity on Intuit is a Bull Put Spread using a strike $67.50 short put and a strike $62.50 long put offers a potential 14.94% return on risk over the next 29 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $67.50 by expiration. The full premium credit of $0.65 would be kept by the premium seller. The risk of $4.35 would be incurred if the stock dropped below the $62.50 long put strike price.

The 5-day moving average is moving up which suggests that the short-term momentum for Intuit is bullish and the probability of a rise in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for Intuit is bullish.

The RSI indicator is at 67.28 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here

Why Intuit Shares Might Keep Rallying

Brian Pacampara for The Fool writes...

What: Shares of Intuit (NASDAQ: INTU  ) climbed 1.5% today after Bank of America upgraded the accounting software specialist from neutral, to buy.

So what: Along with the upgrade, analyst Kash Rangan raised his price target to $78 (from $69), representing about 16% worth of upside to yesterday's close. While value investors might be turned off by the stock's steady surge since late June, Rangan believes that continued growth at its small-business segment should fuel even further price appreciation.

Now what: BofA likes Intuit's risk/reward trade-off at the current levels. "We are upgrading INTU, as we see a changing in guard with the SMB business growing increasingly important," wrote BofA. "With consumer tax expectations moderating, we believe the opportunity in SMB/Pro Tax will be increasingly apparent." With Intuit shares surging to a new 52-week high today and trading at a 20-plus P/E, I'd wait for some of the enthusiasm to fade before betting too much on those prospects.

IRS Form 2106: Deducting Business Travel Expenses

IRS Taxforms.net writes: Did you know that you don’t have to own your own business in order to claim business expense deductions?  That’s right- if you pay money for job-related things (usually travel) then use IRS Form 2106 to get a deduction. However, if your employer reimbursed you for the expenses then Form 2106 does not apply in your case.  But if your employer reimbursed you and also made you pay taxes on the reimbursement by including the amount in box 1 of your W2, then that is not considered reimbursement and you would indeed fill out IRS Form 2106.  Confused yet?  Read on.

What is an “Accountable Plan”?

If your employer makes you keep records and receipts of your business travel expenses and then that means you have an accountable plan for businesses expenses.  If this is the case, then you would not be bothering with IRS Form 2061.  If you were not reimbursed then you use Form 2106 for a business tax deduction.

If, as a result of business expenses you incurred for your job show up in Box 1 of your W2, you are getting “reimbursed” but it’s showing up as wages.  If your employer reimburses you for business expenses by increasing your wages, then you are paying taxes on that amount and therefore you are still entitled to a tax deduction even though you were reimbursed.  It’s all about whether or not your “reimbursements” show up in Box 1.  In other words, you shouldn’t be taxed on money you spent for your job.

IRS Form 2106 vs. Schedule A

Form 2106 is used in relation to Schedule A to figure your business deductions.

Generally speaking, Form 2106 is for job-related travel expenses for which you did not get reimbursed.  If you are claiming other business expenses then you would use Schedule A on your IRS Form 1040.  Remember, your job may have “reimbursed” you in the form of some extra wages, but in that case the amount would show up in Box 1 of your W2 statement, and therefore is not considered a reimbursement because you paid taxes on it.  You would still file Form 2106.

What goes on Schedule A instead of on IRS Form 2106?  Gifts, home office expenses, professional fees, tuition, etc.  Only the travel stuff like transportation and meals goes on Form 2106.

For a look at IRS Form 2106 visit the IRS website for the downloadable copy here.

Sticker shock awaits many taxpayers on preparing their 2013 tax return

Thomson Reuters Tax & Accounting News tax & accounting News writes:While most tax practitioners are aware of the many tax changes that are effective for the 2013 tax year, many taxpayers may not be. They may be surprised to learn that the tax landscape has shifted precipitously for those who find themselves on the wrong side of a new divide between “middle class” and “higher earners.” These higher earners are now subject to an array of new taxes, higher rates, and stringent deduction limits.

Effective in 2013, new rules impose significantly higher taxes on higher earners, increasing the importance of tax awareness and tax planning. Under the Affordable Care Act (P.L. 111-148, 3/23/2010 and P.L.111-152, 3/30/2010, collectively) there is a higher payroll tax and a surtax on the unearned income of higher-income individuals. Under the American Taxpayer Relief Act of 2012 (P.L. 112-240, 1/2/2013), higher tax rates apply to ordinary income, capital gains and dividends, while at the same time limitations are imposed on the use of the personal exemption and itemized deductions. This article highlights these changes.

Brave new tax world. For tax years beginning after Dec. 31, 2012, the following rules apply:

• Increased payroll tax for high-earning workers and self-employed taxpayers. An additional 0.9% hospital insurance tax (i.e., a component of the Federal Insurance Contributions Act (FICA) payroll tax imposed on wages) applies to wages received with respect to employment in excess of: $250,000 for joint returns; $125,000 for married taxpayers filing a separate return; and $200,000 in all other cases. The additional 0.9% tax also applies to self-employment income for the tax year in excess of the above figures.
• Surtax on unearned income of higher-income individuals. An unearned income Medicare contribution tax is imposed on individuals, estates, and trusts. For an individual, the tax is 3.8% of the lesser of: (1) net investment income or (2) the excess of modified adjusted gross income over the threshold amount ($250,000 for a joint return or surviving spouse, $125,000 for a married individual filing a separate return, and $200,000 for all others). For surtax purposes, gross income doesn’t include excluded items, such as interest on tax-exempt bonds, veterans’ benefits, and excluded gain from the sale of a principal residence.
• Higher individual income tax rates apply to higher-income taxpayers. The income tax rates for most individuals stay at 10%, 15%, 25%, 28%, 33% and 35%, as in 2012. However, a new 39.6% rate applies for 2013 for income above $450,000 for joint filers and surviving spouses; $425,000 for heads of household; $400,000 for single filers; and $225,000 for married taxpayers filing separately. These dollar amounts are inflation-adjusted for tax years after 2013.
• Capital gain and dividend rates rise for higher-income taxpayers. The top rate for capital gains and dividends rises to 20% for 2013 (up from 15% in 2012) for taxpayers with incomes exceeding $450,000 for joint filers and surviving spouses; $425,000 for heads of household; $400,000 for single filers; and $225,000 for married taxpayers filing separately. In comparison, for taxpayers whose ordinary income is generally taxed at a rate below 25%, capital gains and dividends are subject to a 0% rate, and taxpayers who are subject to a 25%-or-greater rate on ordinary income, but whose income levels fall below the above thresholds, are subject to a 15% rate on capital gains and dividends. Further, the rate under the alternative minimum tax—a tax system separate from the regular tax, designed to limit certain tax benefits—also rises from 15% in 2012 to 20% in 2013 for capital gains and qualified dividends otherwise subject to the 39.6% regular tax rate.
• Personal exemption is limited for high earners. There is a personal exemption phaseout (PEP) for 2013 with a starting threshold of $300,000 for joint filers and surviving spouses; $275,000 for heads of household; $250,000 for single filers; and $150,000 for married taxpayers filing separately. Under the phaseout, the total amount of exemptions that can be claimed by a taxpayer is reduced by 2% for each $2,500 (or portion thereof) by which the taxpayer’s adjusted gross income exceeds the above threshold. These dollar amounts are inflation-adjusted for tax years after 2013.
• Itemized deductions are limited for high earners. There is a limit on itemized deductions for 2013 (i.e., the “Pease” limitation) with a starting threshold of $300,000 for joint filers and surviving spouses; $275,000 for heads of household; $250,000 for single filers; and $150,000 for married taxpayers filing separately. Thus, for taxpayers subject to the “Pease” limitation, their itemized deductions are reduced by 3% of the amount by which the taxpayer’s adjusted gross income exceeds the threshold amount, with the reduction not to exceed 80% of the otherwise allowable itemized deductions. These dollar amounts are inflation-adjusted for tax years after 2013.

While there is a real prospect that high earners will pay more taxes this year, tax practitioners and taxpayers should both keep in mind that it’s almost never too late to better a taxpayer’s tax situation, minimizing taxes to the greatest extent possible. Year-end tax planning may be especially productive this year because timely action could nail down a host of “extender” tax breaks—individual and business tax provisions that are due to expire at year’s end.

In addition, other tax move may be prove advantageous. Many taxpayers can still better their tax position by acting now to make the most of enhanced expensing and depreciation; keep adjusted gross income (AGI) down to avoid reduction (or elimination) of the many tax breaks that phase out over higher levels of AGI; make the best tax use of losses; and take full advantage of the available tax credits.

AICPA and 360 Degrees of Financial Literacy Offer Consumers Free Year-End Planning Webcast

This might be the year to cut back on life insurance. Or take home less money. It might even be in your best interest to take a stock market loss.

The American Taxpayer Relief Act (ATRA) and the Net Investment Income Tax (NIIT) have added layers of complexity to personal finance, making it more difficult to navigate the many interconnected pieces of tax, retirement, insurance and investment planning. On October 22, the Personal Financial Planning Section of the American Institute of CPAs and the profession’s 360 Degrees of Financial Literacy program will host a free webcast on year-end planning. An experienced panel of financial practitioners will provide a plain English explanation of the recent changes and provide consumers with insight on considerations for their own year-end planning. The webcast is free and open to the public.

What: A panel of CPA financial planners will explain in plain English the ATRA and NIIT and offer guidance on navigating complexities for year-end planning. Panelists will explain:•       Itemized deduction phase-outs and multi-year/multi-scenario projections

•       The shift from estate tax planning to holistic estate planning

•       The changing needs for trusts and life insurance

•       The effect of 2014 healthcare rules on individuals with and without insurance today

Who:  CPA financial planners Karen Goodfriend, CPA/PFS; Ted Sarenski, CPA/PFS; and Scott Sprinkle, CPA/PFS

When: Tuesday, October 22, 2013, from 1-2 p.m. EDT

How: Reporters and the general public can register in advance for the free webinar. Reporters with questions can contact Kristin Vincenzo with AICPA Public Relations at 212-596-6138 or kvincenzo@aicpa.org.

Tax Tips for the Last Quarter of 2013

Shirley Pulawski  for the HuffingtonPost writes: Tax time may not be right around the corner, but the last quarter of the year is here, so it's time to get in gear to maximize the potential for tax deductions as the year draws to a close.

If you plan your finances carefully and take a look ahead at your income and the tax code for the 2013 year, you could position yourself for some savings come April 15. None of these tips are any substitute for a conversation with a reputable tax lawyer, but it may help make the most of your income and reduce what you owe.

Plan your charitable donations now.

If charitable giving is part of your tax plan, don't wait until the busy month of December to start making end-of-year contributions or at least making decisions about amounts to allocate and to whom. Put together a list now of reputable charities to which you would like to donate, and budget appropriately.

Increase retirement account contributions

Another way to lower your taxable income is to pay more into your retirement plan if you're not already maxed out. Ratchet up your 401(k) or IRA contributions to save on taxes owed and boost your retirement security at the same time. Most people under 50 years of age can contribute up to $17,500 (or $5,500 more over age 50) annually, so crunch the numbers and see if this is right for you.

Spend down flexible spending accounts

If you're in a pre-tax flexible spending program through your employer, check your balance and spend the amount down between now and the end of the year, if possible. Some eligible expenses may include eyewear, medical devices, and even co-payments and deductibles.

Sell off losing stocks

If you have stocks that are worth less than what you paid for them, and you don't want to hang onto them, you can sell them and take a capital loss on your tax return. While selling the stocks in order to be able to declare the loss on your tax return might only make up for a small percentage of the loss, you can claim up to $3,000 annually. Naturally, there is additional paperwork involved, but if you've been looking for a reason to let go of some losers, now could be a good time.

Go green

There is still time left to upgrade to energy-efficient appliances and reap up to a $500 tax credit. This credit was set to expire in 2011, but was extended through the end of this year. If you haven't taken the credit before, some items which may be eligible include water heaters, furnaces, heat pumps, central air conditioners, boilers, and even building Insulation, windows, and a new roof. In a qualifying furnace, circulating fans installed may also count, as well as other renewable or alternative technologies such as biomass burners of stoves that use qualified biomass fuel.

Other credits have been extended as well. Purchases of plug-in electric drive vehicles, combined heat and power systems, onsite renewable energy systems including ground-source heat pumps, and fuel cells and microturbines are scheduled to be extended until Dec. 31, 2016.

Have a plan and know the rules

This is not a comprehensive list of tax deductions or credits, so spend some time at IRS.govto learn more about qualifying expenses and eligible purchases, contributions, and gifts. Do a quick run-through of your income and expected deductions to determine what you'll owe, and if there are sound ways to act now and reduce your tax burden.

In general, there is some good news about changes to the tax bracket structure this year. The standard deduction will increase slightly with inflation, and tax brackets have changed. Wolters-Kluwer, CCH announced last month that the changes are expected to result in an increase in savings for many. The firm said couples filing jointly with an income of around $100,000 could expect to pay around $145 less in taxes, while a anyone making around $50,000 and filing as single could expect a savings of about $72.

High-Earners Affected By New Tax Phase-Outs

Barry Lasik for the Cheif Leader writes: The American Taxpayer Relief Act of 2012 included a provision to phase out, beginning in 2013, both personal exemptions and itemized deductions for higher-income taxpayers. The phase-out will begin when a taxpayer’s adjusted gross income (AGI) reaches a phase-out threshold amount.

The exemption phase-out starts once AGI exceeds $250,000 (single) and $300,000 (married filing jointly). If your AGI falls below these thresholds, this provision has no effect on your taxes. The personal-exemption amount is $3,900 for the 2013 tax year. The phase-out of the personal exemption (sometimes called “PEP”) means for every $2,500 of AGI (or portion of) over these thresholds, personal exemptions are reduced by 2-percent. For single filers, personal exemptions will be fully phased out once their AGI exceeds $372,501; for married couples, once AGI exceeds $422,501.

As mentioned, the exemption amount is $3,900, so each phase-out increment wipes out ($3,900 x 2-percent) or $78 of your deduction, increasing your taxable income by that amount. A family of five would see $390 in deductions disappear with each increment.

Barry and Carol, for example, have an AGI of $412,500 for 2013 and two children for a total of four exemptions totaling $15,600 (4 x $3,900). The threshold for a married couple is $300,000; thus their income exceeds the threshold by $112,500. Dividing that sum by $2,500 equals 45. So (45 x 2-percent) of their $15,600 exemption allowance is phased out, leaving them with a reduced exemption deduction of $1,560. Assuming Barry and Carol are in the 33-percent Federal tax bracket, the phase-out costs them an additional $4,633 ($15,600 x 90-percent x 33-percent).

Using the same scenario, a family of four that earns $375,000, or $75,000 over the threshold, would lose only 60 percent of its allowable personal exemptions, or $9,360; leaving the family with a deduction of $6,240.

The phase-out of itemized deductions (often called the “Pease”) will also raise tax bills for high-income earners by reducing the tax benefit of the certain itemized deductions. These deductions include: mortgage interest; property, income and sales taxes; contributions; and miscellaneous deductions.

The total amount of itemized deductions is reduced by 3-percent of the amount by which the taxpayer’s AGI exceeds the threshold amount, with the reduction not to exceed 80-percent of the allowable itemized deductions.

Barry and Carol from the previous example, who had an AGI of $412,500 for 2013, exceed the threshold for a married couple by $112,500. Their itemized deductions total $24,000. Thus, they must reduce their itemized deductions by $3,375 (3-percent of $112,500), but the reduction must not exceed 80-percent of the deductions. The phase-out is the lesser of $3,375 or $4,800, which is 80 percent of $24,000, or$19,200. Assuming Barry and Carol are in the 33-percent Federal tax bracket, the phase-out will cost them an additional $1,114 ($3,375 x 33-percent).

Taxpayers impacted by these phase-outs would be wise to review potential tax liabilities early in the 2013 tax year to possibly adjust estimated taxes or withholding amounts.

Millionaire's Tax To Be Tough Sell

John D. McKinnon for the Wall St Journal writes: President Barack Obama's proposal to raise taxes on some millionaires will likely please members of his party, but it is unlikely to have much practical impact on federal deficits anytime soon.

The concept, which is expected to be announced Monday among a package of administration ideas, would establish a minimum tax rate—as yet undetermined—for households with annual incomes above $1 million. The broad aim would be to counter the decline in effective tax rates for high-income households, which is largely because of the 15% top tax rates on dividends and capital gains put in place during the Bush administration.

The proposal is unlikely to see its way into legislation, as congressional Republicans have said they oppose any tax increase. But it is likely to add to the debate over how to tax investment income, including dividends and capital gains, at a time when wages have stagnated for millions of middle-class workers.

In White House materials circulated to lawmakers, the administration cited statistics showing that the group of taxpayers likely to be hit the hardest by the idea numbered just 22,000 in 2009. Those are households making more than $1 million annually that pay less than 15% of their income in federal income taxes.

It isn't clear how much that group currently pays in federal taxes. The proposal also could apply to a broader selection of taxpayers—all households with incomes of more than $1 million. Those earners are expected to pay an average of $845,000 this year, according to the nonpartisan Tax Policy Center. Assuming the households in the group of 22,000 pay that amount, even doubling their tax burden would raise just $19 billion a year at a time when deficit reduction is being measured in trillions of dollars. That doesn't take into effect any change in taxpayer behavior prompted by a new tax regime.

A senior administration official said that depending on where the minimum rate is set, the plan could be a "very significant" revenue raiser. The official wouldn't provide details.

The White House has dubbed the proposal the "Buffett Rule" after billionaire investor Warren Buffett, who has urged the federal government to raise the tax rates paid by the wealthiest Americans.

On Sunday, Republicans critiqued the proposal sharply after details emerged during the weekend. "When you pick one area of the economy and you say, we're going to tax those people because most people are not those people, that's class warfare," Sen. Lindsey Graham (R., S.C.) told CNN.

Some conservative economists say such a proposal could put a drag on capital markets and ignores the fact that many companies have already paid tax on the income before it is distributed to owners as dividends or capital gains. Reducing that double taxation was the basic point of the Bush-era changes.

"The corporate tax was already collected before most investment income is taxed at the personal level," said R. Glenn Hubbard, who was the top economist for President George W. Bush while the 2003 changes were being formulated. "It would be great to move beyond the silly season in the president's proposal to a discussion of tax reform."

The average tax rate for the top 400 earners in the U.S. fell to as low as 16.62% in 2007 from a recent peak of 29.9% in 1995. It ticked up again in 2008 to 18.11%, according to the latest annual Internal Revenue Service analysis of returns. Capital gains represented a very high proportion of the top earners' incomes—about 56.7% on average.

Despite this decline, the share of taxes paid by wealthier Americans has been rising, in part because of soaring incomes and also tax breaks for the working poor and the middle class. The top 1% of the taxpayers—those with income above $353,000—got 19.4% of all income in 2007 and paid 28.1% of all federal taxes. In 1987, by contrast, the top 1% got 11.2% of all income and paid 16.2% of all federal taxes.

Previous efforts to impose a minimum tax on the wealthy have had mixed success. The administration's principle resembles the Alternative Minimum Tax, which was first adopted in 1969 and was intended to hit the superwealthy. The AMT has been hitting an increasing number of the middle class because it wasn't indexed for inflation, and Congress has continually wrestled with how to get rid of it.

A surtax on millionaires has been a staple of left-leaning Democrats off and on for years and was raised and dismissed during the 2010 debate that extended the Bush tax cuts.

The tax break for capital gains and dividends, now strongly supported by Republicans in Congress, actually was eliminated by the Tax Reform Act of 1986 that Ronald Reagan backed: It lowered tax rates, but it taxed all income—whether from wages, interest, dividends or capital gains—at the same rate.