On February 17, 2012, Congress approved the Middle Class Tax Relief and Job Creation Act of 2012, extending the 2 percentage point cut on individual payroll taxes through the end of 2012. President Obama is expected to sign the Act as soon as it reaches the White House.

The new Act keeps the individual share of Social Security tax at 4.2% (a 2% reduction from the 6.2% rate) for all wages subject to Social Security in 2012 and reduces the self-employment tax rate from 15.3% to 13.3%. Extending the 2 percentage point cut in Social Security payroll tax would save around $80 monthly for someone earning $50,000 a year and provide a maximum cut of $2,200 to high-end wage earners. Continue Reading >>

The Domestic Production Activities Deduction, Section 199 of the Internal Revenue Code, was introduced into law as part of the American Jobs Creation Act of 2004. Starting with tax year 2005, certain companies with “qualified production activities” can take a 3% to 9% deduction from net income for US-based business activities.  Continue Reading >>

This February, the IRS issued proposed regulations describing what is a "taxable medical device" for purposes of the excise tax imposed by the Health Care and Education Reconciliation Act of 2010 (HCERA or the “Act”). The definition has been linked to sections of the Federal Food, Drug & Cosmetic Act (FDA) and the accompanying regulations. HCERA created new Internal Revenue Code Section 4191 which creates a 2.3 percent excise tax on the total revenues of any company that manufactures medical devices. This excise tax will become effective after 2012. Continue Reading >>

WASHINGTON - The Treasury Department and the Internal Revenue Service today issued proposed regulations for the next major phase of implementing the Foreign Account Tax Compliance Act (FATCA).

Enacted by Congress in 2010, the law targets non-compliance by U.S. taxpayers using foreign accounts. Continue Reading >>

There are many smart and easy steps which can be taken throughout the year that will potentially improve your financial situation. Incorporating tax planning into overall financial planning can help you reduce your tax bill. Opportunities should be planned in advance, along with consultation with advisors, in order to ascertain the most understanding and obtain maximum leverage. The last thing most taxpayers want to discover at tax-filing time, is that they still owe the IRS a large sum of money. Continue Reading >>

The year 2011 was a challenging one; weather wise for many U.S. citizens considering the onset of Hurricanes Irene and Lee and other tropical storms and wildfires. The Internal Revenue Service (“IRS”) has recognized the toll these disasters have on individuals and businesses and has issued relief provisions that aid victims of presidential declared disaster areas. These announcements can be found on the IRS website (irs.gov) or within Federal Emergency Management Agency (“FEMA”) announcements. A taxpayer does not always have to be directly located in one of these areas to qualify. The IRS takes into account that the taxpayer’s records might be at a location in one of these disaster areas (alternative location, accountant’s office, storage, etc...). Continue Reading >>

Charitable giving is not only a rewarding experience, but also an excellent tax tool to reap benefits when it comes to filing income tax returns. Highlighted below are the main areas to consider when planning for charitable giving. Please consult your Marcum tax professional for further consideration in your yearend tax planning. Continue Reading >>

The good news is that the research tax credit was extended. The disappointing news is that it is currently scheduled to expire again on December 31, 2011 unless a new law is passed to extend it again. The same rules are still in effect where the credit applies to new or improved activities using the biological or physical sciences where information is obtained through a process of risk and experimentation. However, there have been a few significant developments in this area through case law in the last few years, some of which provide additional clarity around the rules while others provide taxpayers with additional opportunities. Some of the key areas to revisit this year include: Continue Reading >>

Employers must furnish information statements to their employees to report exercises of incentive stock options ("ISOs") and transfers of stock under employee stock purchase plans ("ESPPs") that occurred during 2011 by January 31, 2012. Employers also must remit this information to the government by February 28, 2012 (or by March 31, 2012 if filing electronically).

Forms 3921 and 3922
If ISO's, as defined under Internal Revenue Code Section 422, were exercised, employers must deliver an information statement on IRS Form 3921 to all employees (excluding nonresident aliens) who have exercised their options in 2011 calendar year. Continue Reading >>

The good news is that the research tax credit was extended. The disappointing news is that it is currently scheduled to expire again on December 31, 2011 unless a new law is passed to extend it again. The same rules are still in effect where the credit applies to new or improved activities using the biological or physical sciences where information is obtained through a process of risk and experimentation. However, there have been a few significant developments in this area through case law in the last few years, some of which provide additional clarity around the rules while others provide taxpayers with additional opportunities. Some of the key areas to revisit this year include: Continue Reading >>