Preparing for a Successful Joint Venture in the Construction Industry
Wednesday, January 30, 2013
Wednesday, January 23, 2013
2013 Inflation Adjustments
The Internal Revenue Service released annual inflation adjustments for tax year 2013, including the tax rate schedules and other tax changes from the recently passed American Taxpayer Relief Act of 2012.
The tax items for 2013 of greatest interest to most taxpayers include:
Beginning in tax year 2013 (generally for tax returns filed in 2014), a new tax rate of 39.6 percent has been added for individuals whose income exceeds $400,000 ($450,000 for married taxpayers filing a joint return). The other marginal rates — 10, 15, 25, 28, 33 and 35 percent — remain the same as in prior years. The guidance contains the taxable income thresholds for each of the marginal rates.
The standard deduction rises to $6,100 ($12,200 for married couples filing jointly), up from $5,950 ($11,900 for married couples filing jointly) for tax year 2012.
The American Taxpayer Relief Act of 2012 added a limitation for itemized deductions claimed on 2013 returns of individuals with incomes of $250,000 or more ($300,000 for married couples filing jointly).
The personal exemption rises to $3,900, up from the 2012 exemption of $3,800. However beginning in 2013, the exemption is subject to a phase-out that begins with adjusted gross incomes of $250,000 ($300,000 for married couples filing jointly). It phases out completely at $372,500 ($422,500 for married couples filing jointly.)
The Alternative Minimum Tax exemption amount for tax year 2013 is $51,900 ($80,800, for married couples filing jointly), set by the American Taxpayer Relief Act of 2012, which indexes future amounts for inflation. The 2012 exemption amount was $50,600 ($78,750 for married couples filing jointly).
The maximum Earned Income Credit amount is $6,044 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $5,891 for tax year 2012.
Estates of decedents who die during 2013 have a basic exclusion amount of $5,250,000, up from a total of $5,120,000 for estates of decedents who died in 2012.
For tax year 2013, the monthly limitation regarding the aggregate fringe benefit exclusion amount for transit passes and transportation in a commuter highway vehicle is $245, up from $240 for tax year 2012 (the legislation provided a retroactive increase from the $125 limit that had been in place).
For more information on tax planning for the 2012 and 2013 tax years, contact Doeren Mayhew’s CPAs in Troy, Mich., or Houston, Texas.
New Reporting Standards for Private Companies Coming
In an effort to create financial reporting that is more relevant and cost effective for private companies, the American Institute of CPAs (AICPA) has released a proposed draft of a new framework that, when finalized, is expected to offer small and mid-sized businesses more streamlined and cost effective financial reporting options.
According to the AICPA, some 20 million privately owned entities not currently required to prepare U.S. generally accepted accounting principles (GAAP) will benefit from the framework.
The draft, Financial Reporting Framework for Small and Medium-Sized Entities, includes two key differences over existing standards, according to a Journal of Accountancy interview with AICPA Vice President of Professional Standards and Services Chuck Landes:
The new framework focuses on historical cost, because research has indicated that the end users of financial statements for smaller businesses are most interested in cash flow, which fair value accounting does not impact.
More options are being built into the framework that will allow smaller businesses to tailor presentation of financial statement data so it is both cost effective to produce and more relevant to the end user.
Comments on the draft are due Jan. 30, 2013, and the framework is expected to be completed in the second quarter of 2013, so stay tuned for more information as the framework enters its final stages.
For more information, contact Doeren Mayhew’s Accounting, Audit and Assurance Group.
According to the AICPA, some 20 million privately owned entities not currently required to prepare U.S. generally accepted accounting principles (GAAP) will benefit from the framework.
The draft, Financial Reporting Framework for Small and Medium-Sized Entities, includes two key differences over existing standards, according to a Journal of Accountancy interview with AICPA Vice President of Professional Standards and Services Chuck Landes:
The new framework focuses on historical cost, because research has indicated that the end users of financial statements for smaller businesses are most interested in cash flow, which fair value accounting does not impact.
More options are being built into the framework that will allow smaller businesses to tailor presentation of financial statement data so it is both cost effective to produce and more relevant to the end user.
Comments on the draft are due Jan. 30, 2013, and the framework is expected to be completed in the second quarter of 2013, so stay tuned for more information as the framework enters its final stages.
For more information, contact Doeren Mayhew’s Accounting, Audit and Assurance Group.
Monday, January 14, 2013
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