internal revenue service

Tax

Tax Relief Extended for Victims of Hurricane Sandy

In the aftermath of Hurricane Sandy, the Internal Revenue Service announced additional tax relief to affected individuals and businesses, further extending tax deadlines until April 1 for the following FEMA-designated counties:

  1. In New Jersey (starting October 26): Monmouth and Ocean counties.
  2. In New York (starting October 27): Nassau, Queens, Richmond and Suffolk Counties.

In addition, the IRS will work with any taxpayer who resides outside the disaster area but whose books, records or tax professional are located in the areas affected by Hurricane Sandy. All workers assisting the relief activities in the covered disaster areas who are affiliated with a recognized government or philanthropic organization are eligible for relief.

This tax relief postpones various tax filing and payment deadlines that occurred starting in late October. As a result, affected individuals and businesses have until April 1, 2013, to file these returns and pay any taxes due. This includes the fourth quarter individual estimated tax payment, normally due January 15, 2013. It also includes payroll and excise tax returns and accompanying payments for the third and fourth quarters, normally due on October 31, 2012 and January 31, 2013 respectively, and calendar year corporate income tax returns due March 15. Tax-exempt organizations required to file Form 990 series returns with an original or extended deadline falling during this period also qualify for this tax relief.

The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply to any taxpayer located in the disaster area.

Contact us today if you’re a taxpayer living outside of the impacted area and think you may qualify for this relief.

Tax

Penalty Relief for Farmers and Fishermen

The Internal Revenue Service announced that it will issue guidance on relief from the estimated tax penalty for farmers and fishermen who are unable to file and pay their 2012 taxes by the March 1 deadline due to the delayed start for filing tax returns.

The American Taxpayer Relief Act (ATRA), which was signed into law in early January affected several tax forms that are often filed by farmers and fishermen, including Form 4562, Depreciation and Amortization (Including Information on Listed Property).

The IRS is providing this relief because delays in the agency’s ability to accept and process these forms may affect the ability of many farmers and fishermen to file and pay their taxes by the March 1 deadline. The relief applies to all farmers and fishermen, not just those who must file late released forms.

Normally, farmers and fishermen who choose not to make quarterly estimated tax payments are not subject to a penalty if they file their returns and pay the full amount of tax due by March 1. Under the guidance to be issued, farmers or fishermen who miss the March 1 deadline will not be subject to the penalty if they file and pay by April 15, 2013. A taxpayer qualifies as a farmer or fisherman for tax-year 2012 if at least two-thirds of the taxpayer’s total gross income was from farming or fishing in either 2011 or 2012.

Farmers and fishermen requesting this penalty waiver must attach Form 2210-F to their tax return and can be submitted electronically or on paper. If you’re a farmer or fisherman and need to request a penalty waiver, do not hesitate to call us. We can help.

Tax

IRS Updates Withholding Guidance for 2013

The Internal Revenue Service has released updated income-tax withholding tables for 2013 and supersede the tables issued on December 31, 2012. The newly revised version contains percentage method income-tax withholding tables and related information that employers need to implement these changes.

In addition, employers should also begin withholding Social Security tax at the rate of 6.2 percent of wages paid following the expiration of the temporary two-percentage-point payroll tax cut in effect for 2011 and 2012. Payroll tax rates were not affected by the legislation signed into law on January 2.

Employers should start using the revised withholding tables and correct the amount of Social Security tax withheld as soon as possible in 2013, but not later than February 15, 2013. For any Social Security tax under-withheld before that date, employers should make the appropriate adjustment in workers’ pay as soon as possible, but not later than March 31, 2013.

Employers and payroll companies will handle the withholding changes, so workers typically won’t need to take any additional action, such as filling out a new W-4 withholding form.

As always, it’s prudent for workers to review their withholding every year and, if necessary, fill out a new W-4 and give it to their employer. For example, individuals and couples with multiple jobs, people who are having children, getting married, getting divorced or buying a home, and those who typically wind up with a balance due or large refund at the end of the year may want to consider submitting revised W-4 forms.

Give us a call if you have any questions about income tax withholding in 2013. We’re here to help.

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Copyright All rights Reserved. Financial Dream Team, like all providers of personal financial services is required by law to inform their clients of their policies regarding privacy of client information. The information in this material is not intended as tax or legal advice. Financial Dream Team, USA, LLC is a registered business in Califronia. Provided content is for informational purposes only.

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