We're Here All Year!

Many clients see their CPAs at tax time, when the main focus is on completing and filing their tax return.  As a result, they may not take the opportunity to ask questions about long-term tax planning or about other important financial concerns. The good news is that we are available to you all year. We have a fulltime, year-round staff of experts with extensive expertise in a broad range of financial areas. We’re ready when you are to take some time reviewing your financial situation, helping you understand your options and make the best decisions. We’re also here in an emergency to help address unexpected financial concerns. So, give us a call to discuss your important financial issues whenever they arise.

Home Office Deduction

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The IRS has the following six requirements to help you determine if you qualify for the home office deduction.

1. Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly: as your principal place of business; or as a place to meet or deal with patients, clients or customers in the normal course of your business; or in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.
2. For certain storage use, rental use or daycare-facility use, you are required to use the property regularly but not exclusively.
3. Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.
4. There are special rules for qualified daycare providers and for persons storing business inventory or product samples.
5. If you are self-employed, use Form 8829, Expenses for Business Use of Your Home to figure your home office deduction and report those deductions on Form 1040 Schedule C, Profit or Loss From Business.
6. If you are an employee, additional rules apply for claiming the home office deduction. For example, the regular and exclusive business use must be for the convenience of your employer.

For more information, please contact our office to discuss these requirements and if you qualify.


Pubicaly Traded Partnerships

Publicly Traded Partnerships (PTPs) or Master Limited Partnerships (MLPs) are currently very popular investments.  These PTPs/MLPs have ownership units or interests that can be traded on established securities markets.  These PTPs/MLPs pass-through ordinary income and expenses of the entity that are attributable to the individual taxpayer reported on a Form K-1, Partner’s Share of Income, Deductions, Credits, etc.  The amounts on the K-1 are then reported on the individual’s income tax return.  When determining whether or not to sell these investments, please be aware that there is a possibility of ordinary gain/loss on the sale of the investment in addition to the capital gain/loss nature of the original investment.  If you are invested in PTPs/MLPs and are contemplating selling your position in these investments, we suggest calling our office to discuss the potential ordinary gain/loss aspect that may be attributable to your situation.



2013 Outlook

There is a lot of uncertainty about which tax rules will apply in 2013.  Will the income tax rates be extended another year, revert back to the pre-Bush Tax cut rates or something completely different?  Our firm will continue to keep abreast of any activities in Congress that will affect the 2013 tax rates. One new tax appears to be coming, the 3.8% Medicare surtax on investment income for single filers with AGI over $200,000 and married couples with AGIs over $250,000.  Investment income includes interest, dividends, capital gains, annuities, royalties and passive rental income.  Investment income for this surtax does not include tax-free interest, retirement plan payouts or tax-free profit from the sale of a home.  If you would like to discuss the impact this surtax may have on your total tax picture, please contact our office.


Arizona Use Tax

As a reminder, keep track of any purchases you make throughout 2012 where you do not pay any sales tax.    The State of Arizona is requiring self-reporting by taxpayers of use taxbased on Arizona Revised Statute (ARS) Sec 42-5169 which states if a person stores, uses or consumes tangible personal property subject to sales tax for a nonbusiness purpose and the tax was not collected by a registered retailer, the individual shall declare the annual amount of tax due on the taxpayer’s individual income tax return.  If you have already paid the sales tax to another state whose sales tax rate is equal to or greater than 6.6% (AZ use tax rate) no use tax will be due.  For example, a purchase from Amazon.com where no sales tax is paidwould be subject to the self-reporting of use tax on your AZ individual income tax return.