Archives For Insurance

PLANNING FOR BUSINESSES [Part 7/7]

Renewable Resources Credit

ATRA modified the Code Sec. 45 renewable electricity production tax credit for electricity produced from wind and other qualified facilities. ATRA replaced certain placed-inservice deadlines with new deadlines and revised certain definitions, including the term “municipal solid waste.” The amount of the credit varies depending on the type of technology. Continue Reading…

Beginning Jan. 1, 2014 the Affordable Care Act (ACA) will come into full effect. While parts of the law are already in place, 2014 will bring in a whole new set of changes, including dozens of tax provisions, that can be difficult to understand. Among them is the requirement for minimum essential coverage, which mandates individuals maintain an approved health insurance plan or face a penalty – the greater of 1% of household income or $95 per household member.

Thanks to the folks at Block Talk, we’re going to post a series of infographics that make it easier to understand the 1,000-plus page ACA. Read close! Most of these provisions don’t apply to everyone:

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The Affordable Care Act has been given the go-ahead by the Supreme Court on Thursday. This act requires U.S. citizens to obtain health insurance or pay a tax. The act will not be instituted until 2014, however, wealthy taxpayers may start feeling the burden in 2013 when they start paying a higher Medicare tax to help cover costs. If you do not have health insurance by 2014, expect to be paying the IRS at a higher rate.

“The government can’t force you to buy insurance, but it can tax you for not buying it,” said John Roth, senior tax analyst with CCH Group.

When filing your income tax returns in 2014, you are most likely going to see a line asking for proof of health insurance. If you fail to properly prove your coverage, the government has the power to penalize you at a certain extent. The IRS cannot put a lien on your house, but they can take away some of your refund or credit. For single people, the penalties start at $95 or 1% of your income (whatever is higher) and by 2016, it rises to $695. For families, the penalties have not been set but will be higher than those filing as single.

The idea of the Affordable Care Act is to encourage people to get health insurance. This will ensure that when accidents or emergencies occur, uncovered costs on the system will not occur. It will also enable low-income individuals and families to be covered by wealthier individuals and families. To compensate for the lower income bracket receiving healthcare, individuals and families who make $200,000 or $250,000 or more, respectively, will have to pay an extra 0.9% on earned income and 3.8% Medicare tax on investment gains (interest, dividends, capital gains, rental income, and annuity income).

“In the case of a married couple with a joint income of $225,000 and $25,000 in capital gains, there would be no extra 3.8 percent tax. But if they had $35,000 in capital gains, their $260,000 in income would meet the threshold and $10,000 would be subject to the extra tax,” said Tim Steffen, Robert W. Baird & Co.’s director of financial planning.

Just one final note – starting in 2013, in order to deduct medical costs on your income tax return, they must amount to 10% of your adjusted gross income. This is fairly difficult, so if you were planning on getting Lasik eye surgery or laser hair removal, think about doing it in 2012 where the deduction is 7.5% of your adjusted gross income.

JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.

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Part of rebuilding New Orleans caused residents often to be challenged with the task of tracing home titles back potentially hundreds of years. With a community rich with history stretching back over two centuries, houses have been passed along through generations of family, sometimes making it quite difficult to establish ownership. Here’s a great letter an attorney wrote to the FHA on behalf of a client:

You have to love this lawyer…….

A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down. After sending the information to the FHA, he received the following reply:

(Actual reply from FHA):
“Upon review of your letter adjoining your client’s loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin.”

Annoyed, the lawyer responded as follows:
(Actual response):
“Your letter regarding title in Case No.189156 has been received. I note that you wish to have title extended further than the 206 years covered by the present application.
I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased by the United States from France, in 1803 the year of origin identified in our application. For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain. The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Queen Isabella.
The good Queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus’s expedition…Now the Pope, as I’m sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana. God, therefore, would be the owner of origin and His origins date back to before the beginning of time, the world as we know it, and the FHA. I hope you find God’s original claim to be satisfactory. Now, may we have our loan?”

The loan was immediately approved.