Author: heschlawadmin

Tax | Estate Law Planning – Articles

2012 Expiring Incentives

2012 began with great uncertainty over federal tax policy and now, with the end of the year approaching, that uncertainty appears to be far from any long-term resolution. A host of reduced tax rates, credits, deductions, and other incentives (collectively called the “Bush-era” tax cuts) are scheduled to expire after December 31, 2012. To further complicate planning, over 50 tax extenders are up for renewal, either having expired at the end of 2011 or scheduled to expire after 2012. At the same time, the federal government will be under sequestration, which imposes across-the-board spending cuts after 2012. The combination of all these events has many referring to 2013 as “Taxmeggedon.”
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Unpaid Use Tax

The State of Ohio is aggressively looking for businesses that may owe Ohio Use taxes. In addition to pursing out-of -state businesses who should be collecting and remitting Use Tax to the State of Ohio, the Department of Taxation is now looking for Ohio businesses that may not have paid use tax on purchases of property used in Ohio.

Use Tax is a tax on the storage, use or other consumption of tangible personal property in Ohio. The tax is a compliment to the Ohio Sales Tax. In general if you have paid Ohio Sales Tax on a purchase you would not owe Use Tax on the purchase.
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Trust fund babies aren’t just born to millionaires and billionaires. They’re also sons and daughter of everyday people with a solid financial plan.
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Holidays can present ideal opportunity to jumpstart financial conversations.

Only a quarter of U.S. adults with children talk regularly with their own parents about financial matters according to a recent survey conducted by Harris Interactive for the American Institute of CPAs. Thirteen percent never have the conversation and 45 percent talk about finances only annually or less often.
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On January 1, 2011 nearly all of the Bush era tax cuts will expire. Thus taxes will automatically increase in 2011 without any action being required by congress. All of the marginal tax rates will be increased, with the highest income tax bracket going from being taxed at a marginal rate of 35% to a rate of 39.6%.

Knowing this, there are significant planning opportunities to save taxes by deferring certain deductions which could be taken in 2010 into 2011. One major deduction which can be shifted into future years is the deduction for pension contributions.
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Congress has approved and the President quickly signed a multi-billion dollar tax cut package, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Relief Act) (H.R. 4853). The new law follows through on the framework agreed to on December 6 by President Obama and GOP leaders in Congress. The 2010 Tax Relief Act extends the Bush-era individual and capital gains/ dividend tax cuts for all taxpayers for two years.
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Home Buyer Tax Credits

The National Association of Home Builders has set up a website to find answers to your questions about the $8,000 tax credit for first time home buyers and $6,500 tax credit for qualified repeat home buyers.

The “new” tax credit is available for qualified purchases with a binding sales contract in place on or before 4/30/2010 and closed by 6/30/2010. For qualified military, Foreign Service or employees of the intelligence community, these dates are extended one year.
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Higher Education Costs

The deduction for higher education costs expires at the end of 2009. In addition the American Opportunity Credit replaces the Hope Credit with an increase in the maximum tax credit from $1,800 to $2,500 for 2009 and 2010. Income phase-out levels are raised to $160,000 of adjusted gross income (AGI) for joint filers and $80,000 of AGI for single filers. Also new is the change to make 40% of the tax credit refundable which should enable lower income taxpayers to get a tax refund for 2009 and 2010.
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Proper Planning of Investments In Start-Up Businesses May Eliminate Tax on Gains.

Investors in new start-up businesses should consider the benefits of a provision in the Small Business Jobs act of 2010 which eliminates the tax on gains on the sale of Qualified Small Business (QSB) stock issued between September 27, 2010 and December 31, 2010 and held for more than 5 years.

The act modifies Section 1202, which is a tax provision intended to stimulate cash flow into new start-up companies by reducing the taxes on future gains. The provision was originally enacted in 1993 and excluded 50% of gains on Qualified Small business Stock. The exclusion was increased to 75% for stock acquired after February 17, 2009 and was increased to 100% for stock issued between September 27, 2010 and December 31, 2010.
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Bill Hesch Named “Leading Lawyer” for Ninth Consecutive Year

William E. Hesch, Esq., CPA, PFS, was recently recognized as a “Leading Lawyer” in the Trust and Estate area by Cincy Magazine for 2012. This is the Ninth consecutive year Bill Hesch has received the coveted distinction, which is determined by the ballot of local attorneys.

“This designation reflects excellence in estate planning,” Bill comments. “My background as both an attorney and a CPA makes me an integral professional who is able to address complex legal matters from accounting, financial, and tax perspectives.”
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