Author: Leon Clinton

Tax

Tax Due Dates for November 2012

Anytime Employers – Income Tax Withholding. Ask employees whose withholding allowances will be different in 2013 to fill out a new Form W-4.
November 13 Employers – Social Security, Medicare, and withheld income tax. File Form 941 for the third quarter of 2012. This due date applies only if you deposited the tax for the quarter in full and on time.Employees who work for tips – If you received $20 or more in tips during October, report them to your employer. You can use Form 4070.
November 15 Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in October.Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in October.
Accounting Business Financial Planning Quickbooks Tax

Financial Tips for October 2012

Asset Allocation Adjustments
Review the asset allocation of your portfolio. Increases and decreases in the value of your portfolio can upset the asset allocation you consider optimal. Should you shift some stock investments into or out of bond investments? Should you shift some funds into tax-free investments?

Health Spending Checkup
If your employer has a flexible spending arrangement (FSA), determine the balance left in the plan. Your plan may allow you to carry over a year-end balance for use early in the following year.

If your plan doesn’t allow unspent money to be carried over, then you may want to incur discretionary medical, dental, or optical costs prior to year-end. If you do not participate in such a plan, find out if one is available at your company. Also, find out if you are eligible for a Health Savings Account.

 

Review Budget vs. Actuals
Compare September income and expenditures with your budget. Make adjustments as appropriate to your October expenditures. Make sure you have invested your planned savings amount for September.

Estimate Your 2012 Tax Liability
Total up your taxable income, capital gains, and deductions through this date. Estimate the amounts expected through year-end. Determine where you stand, and what steps, if any, you should take prior to year-end to minimize your tax liability. Please feel free to call our office if you need help figuring this out.

Tax

Five Important Tips on Gambling Income and Losses

Whether you roll the dice, bet on the ponies, play cards or enjoy slot machines, you should know that as a casual gambler, your gambling winnings are fully taxable and must be reported on your income tax return. You can also deduct your gambling losses…but only up to the extent of your winnings.

Here are five important tips about gambling and taxes:

1. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes such as cars and trips.

2. If you receive a certain amount of gambling winnings or if you have any winnings that are subject to federal tax withholding, the payer is required to issue you a Form W-2G, Certain Gambling Winnings. The payer must give you a W-2G if you receive:

  • $1,200 or more in gambling winnings from bingo or slot machines;
  • $1,500 or more in proceeds (the amount of winnings minus the amount of the wager) from keno;
  • More than $5,000 in winnings (reduced by the wager or buy-in) from a poker tournament;
  • $600 or more in gambling winnings (except winnings from bingo, keno, slot machines, and poker tournaments) and the payout is at least 300 times the amount of the wager; or
  • Any other gambling winnings subject to federal income tax withholding.

3. Generally, you report all gambling winnings on the “Other income” line of Form 1040, U.S. Federal Income Tax Return.

4. You can claim your gambling losses up to the amount of your winnings on Schedule A, Itemized Deductions, under ‘Other Miscellaneous Deductions.’ You must report the full amount of your winnings as income and claim your allowable losses separately. You cannot reduce your gambling winnings by your gambling losses and report the difference. Your records should also show your winnings separately from your losses.

5. Keep accurate records. If you are going to deduct gambling losses, you must have receipts, tickets, statements and documentation such as a diary or similar record of your losses and winnings.

If you have questions about gambling income and losses, don’t hesitate to call us.

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