How do you spell Kositzka?
K-O-S-I-T-Z-K-A
Where is Kositzka, Wicks, and Company located?
From I-395 S, Henry G Shirley Memorial Hwy: Exit onto the ramp at sign reading "Exit 2B West Edsall Rd". Turn right at the first traffic light and turn right again immediately onto Cherokee Ave. The second building on the left is 5500 Cherokee Avenue. We are in Suite 400. Click here to see a map of the surrounding area.
What is the current year Social Security wage base and Medicare Taxes?
For 2011, the maximum amount of wages subject to Social Security tax was $106,800. On all wages paid up to that amount from a single employer, 6.2% Social Security tax is withheld. Above that amount, only the health insurance portion is withheld at a rate of 1.45%. For the year 2012, the wage base moves to $110,100. The rates remain the same.
What is the IRS mileage allowance?
For 2012, the business standard mileage rate will be 55.5¢. Also for 2012, mileage related to charitable activity may be deducted at 14¢ per mile. The mileage related to moving and medical treatment is deductible at 23¢ per mile for 2012.
What is the amount of personal and dependent exemption?
For 2011, the exemption is valued at $3,700. For 2012, the exemption increases to $3,800.
How about the standard deduction?
The standard deduction depends on your filing status, age and whether or not you are legally blind.
In general, the standard deductions are as follows:
| 2011 | 2012 | |
| Single taxpayer | $5,800 | $5,950 |
| Married filing joint (and surviving spouse) | $11,600 | $11,900 |
| Married filing separate | $5,800 | $5,950 |
| Head of household | $8,600 | $8,700 |
For taxable year 2011, the standard deduction amount for an individual who may be claimed as a dependent by another tax payer may not exceed the greater of (i) $950, or (ii) the sum of $300 and the individual’s earned income. In addition, the standard deduction amount for the aged and blind is $1,150 and $1,450 if the individual is married or unmarried, respectively.
Didn’t I pay that bill?
When in doubt, send a check.
Am I subject to the Alternative Minimum Tax (AMT)?
Every individual is subject to the AMT. Each of us has, in addition to our regular taxable income, our Alternative Minimum Taxable Income. If the Alternative Minimum Tax is higher than our regular tax we are subject to that higher number. Fortunately, the AMT doesn't catch most of us. However, the exemption allowed isn’t automatically adjusted to keep up with inflation and therefore Congress must “patch it” each year. Otherwise it could ensnare 20 million more taxpayers than it does. Everyone should be aware of the AMT and take it into consideration when planning.
How much can I defer into my 401(k) Plan?
The dollar amount for 2012 moves up to $17,000, from $16,500 in 2010.There is a $5,500 maximum catch-up contribution if you are 50 or older for 2012, the same as in 2011. While the total deferral could not exceed 15% of your compensation for 2001, that limit was deleted for 2002 and thereafter. These rules are complex and somewhat tricky. Check with your personal advisor before taking any action.
How large a gift can I give to my children or grandchildren without having to report to the IRS?
The Estate, Gift and Generation Skipping (GST) tax law has changed significantly, though temporarily for 2011 and 2012. We strongly urge those with estates at, above or close to the exclusion amount to have their planning reviewed to make sure they are taking advantage of the current rules.
The annual exclusion for gifts to each individual donee remains at $13,000. No IRS filing is required for gifts that do not exceed this limit.
However, the lifetime exemption for the estate, gift, and GST has been increased to $5,120,000 for 2012 and is "unified", meaning the exemption amount applies to all three. In addition the exemption is now "portable", meaning that if one spouse dies and does not use the entire exclusion, any balance can be transferred to the survivor.
Qualified Transportation Fringe
The 2012 monthly limitation regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $125 and another $240 for qualified parking.
Income from United States Savings Bonds for Taxpayers Who Pay Qualified Higher Education Expenses.
For 2012 the exclusion begins to phase out for modified adjusted gross income above $109,250 for joint returns and $72,850 for other returns. This exclusion completely phases out for modified adjusted gross income of $139,250 or more for joint returns and $87,850 or more for other returns.
Election to Expense Certain Depreciable Assets
For 2011 the aggregate cost of any Section 179 property placed in service a taxpayer may elect to treat as an expense may not exceed $500,000. The maximum amount allowed is reduced dollar for dollar by any excess of the amount of property placed in service exceeding $2,000,000. For example if the taxpayer places $2,150,000 of Section 179 property in service during 2011, the maximum expensing allowance of $500,000 is reduced by $150,000 to $350,000.
For 2012 the limit is reduced to $125,000 with the phase-out adjusted to $560,000. However, Bonus Depreciation may be more beneficial to you. Contact us to discuss the options.
2012 Qualifications for Medical Savings Accounts
For self-only coverage a health plan that has an annual deductible that is not less than $2,100 and not more than $3,150 and under which the annual out-of-pocket expenses required to be paid for covered benefits does not exceed $4,200
For family coverage a health plan that has an annual deductible that is not less than $4,200 and not more than $6,300 and under which the annual out-of-pocket expenses required to be paid for covered benefits does not exceed $7,650
How much money can I earn without cutting into my Social Security Benefits?
If you are under full retirement age when you start getting your Social Security payments, $1 in benefits will be deducted for each $2 you earn above the annual limit. For 2011 and 2012, that limit is $14,160.
Also important to remember: When you continue to work while you are collecting benefits, the SSA reviews your record every year to see if those additional earnings will increase your monthly payment. If there is an increase, the SSA will send you a notice of your new benefit amount. Check the Social Security website for a lot more details. (See our links page.)