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August 2013
Issue: 45

Tax Law Update & Property Tax Returns Due August 15th

 

I hope everyone is enjoying the summer and getting plenty of rest and relaxation.  We've had a busy summer here in the office but still manage to find time to get out and enjoy ourselves.  From a tax standpoint things have slowed down considerably since the beginning of the year.  There is a lot of talk about tax reform in Congress but nothing is remotely imminent in that respect.  The state of Minnesota passed a big tax bill in June and I have included an article for all of our Minnesota clients highlighting the new tax laws.  Keeping with the standard set by the federal government, high income earners in Minnesota will see a tax increase this year as a result of the new tax law.  

 

Also, the IRS passed a law earlier this year offering a new, simplified standard deduction option for claiming a home office.  The new deduction is calculated by using $5 per square foot of the home office up to a maximum of a $1,500.  I have included an article in this newsletter containing the details of this new deduction.  This will make claiming a home office on your tax return much easier, although you still have the option of using the old method if that results in a larger deduction.  The new law also indicates that the IRS has significantly softened its stance on the home office deduction.  This deduction is not the red flag that it used to be and everyone should claim it if they are eligible.

I also wanted to remind our Minnesota clients that property tax returns are due on August 15th.  We have filed many of these for our clients already and you should have received a letter in the mail from us if you were entitled to a refund.  If you don't receive any notification from us and you think you are entitled to a property tax refund, please contact us and we'll see if you qualify or not.

 

Enjoy this month's newsletter!

 

Governor Dayton signed the new Minnesota Omnibus Tax Bill (HF677) at the end of the most recent legislative session. Below is a summary of several of the changes that will impact taxpayers required to file Minnesota returns:

  • Increase to individual, trust and estate income tax rates for 2013
  • Changes to estate regulations in Minnesota
  • New gift tax regulations for Minnesota effective July 1, 2013
  • Changes to corporate taxes  
  • Changes to sales and use taxes
  • Changes to property tax and renters' refunds 

Simplified Option for Home Office Deductions

Do you work from home? If so, you may be familiar with the home office deduction, available for taxpayers who use their home for business. Beginning this year, there is a new, simpler option to figure the business use of your home.

 

This simplified option does not change the rules for who may claim a home office deduction. It merely simplifies the calculation and recordkeeping requirements.

 Read more...


Get a Jump-Start on Your 2013 Tax Tab

 

With new taxes plus hikes on existing taxes, it is more important than ever to employ strategies to cut your tax bill. 

 

Midyear tax planning is usually a dull, albeit worthwhile, affair. This year, though, the summer ritual could keep taxpayers on their toes, thanks to a slew of new taxes plus hikes on old ones for 2013. It's more important than ever to employ strategies to trim payments to Uncle Sam...

 

Read more... 

 

 

In This Issue
Governor Dayton Signs Tax Law Changes
Simplifying Your Home Office
Tips For 2013 Tax Tab
Hobby Loss Rules
Upcoming Tax Deadlines
How Not to Run a Side Business: Hobby Loss Rules

 

A buddy of mine stopped by the office today for some free tax advice. He's a very successful salesman, but he recently felt the itch to start a side business. I didn't catch exactly what the business would do- something about a company that makes computers or a computer that makes companies - but either way, he anticipated heavy losses in the initial years and was curious about the tax implications. I saw this as the perfect opportunity to explain a bit about the "hobby loss" rules.

Upcoming Tax Deadlines

Please let us know if there is anything we can do for you!!

 

Vetscher & Associates, LLC

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