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Spring and summer -- the wedding season is upon us. Before walking down the aisle, take a minute to consider a serious matter.Couples often enter into marriage without ever having had a discussion about financial issues. As a result, they find themselves frequently arguing about money. If you are planning a wedding, here are some steps you can take to get your marriage off to a good financial start.* Premarital financial discussions. You and your intended might enjoy the same movies and the same kinds of food, but are you financially compatible? Take some time to discuss your finances before you tie the knot. Talk about your assets, your debts, your credit ratings, and your financial attitudes, including your spending and saving habits. Do you share the same goals, such as having children, buying a home, or continuing your education? How will you finance your dreams?* How will you handle your finances as a married couple? For example, who will pay the bills? Will you maintain joint or separate checking accounts? If you maintain separate accounts, how will you split your expenses?* Premarital financial counseling. Every couple needs to work out their own style for handling money. Call upon your accountant to assist you in setting up a budget, controlling your taxes, and mapping out a financial plan for your future.* Premarital legal counseling. If you have substantial assets, discuss the merits of a premarital agreement with your attorney. If your partner has substantial debt, ask your attorney how you can protect yourself from his or her creditors.Perhaps you plan on buying a house together or combining financial accounts.  Your attorney can advise you on the best way to hold title to your assets.Discussing your finances before you say "I do" may increase your chances for living happily ever after.  Give us a call if you would like assistance in this area.

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If spring cleaning has left you with items that you want to donate to charity, remember that donations of used clothing and household items must generally meet certain requirements to be tax-deductible. First, such items must be in "good used condition or better." Second, a receipt from the charity is required. If the property is valued under $250 and a receipt is not available, such as at unattended drop-off locations, reliable written records are still required.

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Group of 3 business peopleThe IRS wants to educate new small business owners about their federal tax responsibilities. "Understanding and meeting their tax filing requirements is one of the biggest challenges faced by people starting out in business," says the head of the IRS Small Business Division.Among the common tax issues that can trip up new business owners:* Classification of workers. Determining whether workers are employees or independent contractors is a matter of law, not the choice of the worker or the employer.* Federal employment tax deposits. Called trust fund taxes, these deposits must be made according to the appropriate schedule, depending on deposit amounts.* Quarterly estimated tax payments. Business earnings are not subject to tax withholding; therefore, the owner's income and social security tax obligations are met through quarterly estimated tax payments.* Recordkeeping. New businesses need a good recordkeeping system to make tax filing easier and accurate.* Disaster protection. Financial and tax records need to be protected to ensure business continuity in the event of a disaster.* Tax scams. New business owners should be alert to the prevalence of abusive tax avoidance schemes. Falling victim to one of these schemes could result in serious tax problems.For guidance in getting a new business off on the right tax foot, give our office a call at 302.225.5000.

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Doctor Assessing A PatientThe U.S. Supreme Court will soon issue its ruling on the health care legislation -- the "Patient Protection and Affordable Care Act" -- passed in 2010. Over half the individual states have challenged the constitutionality of the law that requires individuals to obtain minimum health insurance coverage and penalizes those who don't comply. The law could be upheld or overturned or the court might strike down select provisions.Although the health care mandate has received the most attention, three lesser-known tax changes in the law could have a major impact. If these provisions are allowed to stand, they will take effect in 2013.1. Medicare surtaxes. Taxpayers will owe a new 3.8% Medicare surtax on the lesser of net investment income or the amount by which modified adjusted gross income (MAGI) exceeds an annual threshold of $250,000 for joint filers and $200,000 for single filers. For this purpose, "net investment income" includes interest, dividends, royalties and annuities, rent and other passive activity income, capital gains from the sale of property not used in your business, and trading of financial instruments and commodities. It does not include business income, income from tax-free municipals, or distributions from IRAs and qualified retirement plans.In addition, a separate 0.9% Medicare surtax applies to earned income in excess of $250,000 for joint filers and $200,000 for single filers. A taxpayer might have to pay both surtaxes.2. Medical deductions. Currently, a taxpayer may deduct unreimbursed medical expenses in excess of 7.5% of adjusted gross income (AGI). This threshold is scheduled to increase to 10% in 2013 for those under age 65.3. Flexible spending accounts. Currently, there is no legal limit on annual contributions to a flexible spending account (FSA) for health care expenses. Under the health care law, annual contributions to a health-care FSA are capped at $2,500. This amount will be indexed for inflation after 2013.Faced with these looming tax changes, you may take appropriate steps before 2013. For instance, you might realize long-term capital gains in 2012 to avoid the 3.8% Medicare surtax, especially since the maximum tax rate is only 15% this year (scheduled to increase to 20% in 2013). Similarly, you might consider accelerating nonemergency medical expenses into 2012 to benefit from the lower AGI threshold or to exhaust FSA funds.We will keep you posted on any major new developments. Don't hesitate to contact us for tax planning guidance suited to your situation.

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Once you have filed your 2011 tax return, you may still have a few tax questions. The IRS provides these answers to commonly asked questions.How can I check the status of my refund?You can go online to check on your refund. Go to www.irs.gov and click on "where's my refund?" Or call 1-800-829-4477 for automated refund information available 24 hours a day, seven days a week.What records should I keep?Keep receipts, canceled checks, or other substantiation for any deductions or credits you claimed. Also keep records that verify other items on your tax return (W-2s, 1099s, etc.). Keep a copy of the tax return, along with the supporting records, for seven years.What if I discover that I made a mistake on my return?If you discover that you failed to report some income or claim a deduction or credit to which you are entitled, you can correct the error by filing an amended tax return using Form 1040X.What if my address changes after I file?If you move or have an address change after filing your return, send Form 8822 "Change of Address" to the IRS. You should also notify the Postal Service of your new address so that you'll receive any refund you're due or notices sent by the IRS.For answers to other tax questions you may have, give us a call.

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Subscribe to Blog: May 2012