Taxpayers are now able to pay their New Jersey personal (Gross Income) tax via telephone. All they need to do is call 1-888-673-7694 and provide their credit card information. This new, convenient way of remitting payment will also be available for business taxes later this year.
Pamela Avraham Quoted in Sunday Star Ledger
The Newark Star Ledger recently turned to Pamela Avraham of Urbach and Avraham, CPAs for her take on the effects of the 2012 FUTA increase for NJ employers . This FUTA increase is now payable in Jan. 2013 and came as a surprise to many employers. Pamela was quoted in the January 20, 2013 edition, describing the challenge that many staffing agencies face due to the increase. Urbach & Avraham is especially attuned to concerns regarding the FUTA increase, as we service many staffing agencies and small businesses. These firms are going to be impacted more significantly, as they tend to have a larger number of low wage employees.
NJ Issues Technical Bulletin on Sales and Use Tax for Attorneys
On January 15, 2013, the NJ Division of Taxation issued a technical bulletin on the taxability of purchases made by lawyers and law firms. Lawyers who practice in New Jersey are not liable for collecting sales tax on charges for professional services performed by their practice. They are, however, required to pay sales or use tax on all purchases of taxable tangible property, specified digital products, and certain services used by their firm, unless otherwise exempted by law. Purchases subject to sales and use tax that are common to law firms include: [Read more…] about NJ Issues Technical Bulletin on Sales and Use Tax for Attorneys
Limit on Mortgage Interest Deduction for Married Filing Separate
In an interesting 2012 Tax Court case, Bronstein vs. Commissioner, the strict interpretation of the Section 163 limitation on the mortgage interest deduction for married taxpayers filing separately was brought into question. Faina Bronstein and her husband purchased a $1.3 million home in 2007, taking out a $1 million mortgage. The home was their primary residence. The Bronsteins chose the option of “married filing separate” that year, and Faina deducted all of the mortgage interest paid (which amounted to $50,000). The IRS, using a plain interpretation of the statute, disallowed half of Faina’s deduction. Section 163, the statute governing the $1,000,000 limitation provides that: [Read more…] about Limit on Mortgage Interest Deduction for Married Filing Separate
Bank Leumi Urges Disclosure to IRS by its U.S. Clients
Leumi, one of the largest banks in Israel, recently wrote to its U.S. clients urging them to comply with the Internal Revenue Service’s voluntary disclosure program. Leumi and two other Israeli banks, Bank Hapoalim and Mizrahi Tefahot, are under investigation by the U.S. Justice Department in connection with offshore private banking services that may have enabled wealthy Americans to evade taxes. Faced with a federal deficit of roughly 1 trillion dollars, the U.S. government is hungry for more revenue, and has decided to crackdown on overseas tax evasion. If you have an account overseas it would be wise to take advantage of the voluntary disclosure program. Time may be running out.
To read more about the IRS Voluntary Disclosure Program, click here: IRS Voluntary Disclosure
Court Affirms Mortgage Interest Deduction Limitation for Unmarried Couples
Under the Internal Revenue Code, mortgage interest is deductible from income, provided that the outstanding mortgage balance is less than $1 million. Similarly, interest payable on a home equity line of credit that is used to finance home improvements is deductible as well, but only up to a loan balance of $100,000. An unmarried couple may at first glance assume that if they each buy half of a $2 million house, they can each fully deduct his or her half of the mortgage interest on his or her individual tax return. This would be true if the $1 million limitation is per taxpayer. A recent U.S. Tax Court case ruled otherwise. [Read more…] about Court Affirms Mortgage Interest Deduction Limitation for Unmarried Couples