Noy Tax Associates
Certified Public Accountants
 
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Gina Noy offers her clients stress-free tax preparation. It's not often you find "stress-free" and "tax" in the same sentence, especially during busy season, but for Noy, it's a philosophy that carries through her Manhattan-based CPA firm. Noy, who offers tax planning, budget advice, and bookkeeping services, works with a variety of different clients – from individuals and small businesses to start-ups and medium-sized companies. However, she said her sweet spot tends to be start-ups and companies in their second or third year of business – those moving toward a big growth stage.
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Under the legislation, for joint filers in taxable years beginning after 2011 and before 2015, 
  • taxpayers with New York taxable income of $40,000 to $150,000 will be taxed at 6.45% (previously, 6.85%);
  • taxpayers with New York taxable income of $150,000 to $300,000 will be taxed at 6.65% (previously, 6.85%);
  • taxpayers with New York taxable income of $300,000 to $2 million will be taxed at 6.85% (previously, 7.85% to 8.97%); 
  • taxpayers with New York taxable income over $2 million will be taxed at 8.82% (previously, 8.97%)
For taxpayers with other filing statuses, the top 8.82% rate will apply to head of household filers with New York taxable income over $1.5 million and to single filers with New York taxable income over $1 million. The legislation also provides for a cost of living adjustment to the brackets and the standard deduction.
 
 
With 2011 coming to an end many popular deductions will be ending as well.  This is the last year to take advantage of the favorable tax benefits.

1. Social Security Taxes.
For 2011 only, Social Security tax was reduced to 4.2% for employees and to 10.4% for self-employed (SE) person.  In 2012, the Social Security tax will revert to its regular rate of 12.4%, with half (6.2%) paid by employers and the other (6.2%) paid by employees.   SE person will pay the full 12.4% rate as part of SE tax.

 
 
As taxpayers, it is our responsibility to take advantage of tax credits available to us.  Couple of tax credits and deductions to think about as many of you are getting ready to go back to school.  Typically, these benefits apply to you, your spouse or a dependent for whom you claim an exemption on your tax return. 

1. American Opportunity Tax Credit.  This credit, originally created under the American Recovery and Reinvestment Act, has been extended for an additional two years; 2011 and 2012. The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education. Forty percent of this credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes. Qualified expenses include tuition and fees, course related books, supplies and equipment. The full credit is generally available to eligible taxpayers whose modified adjusted gross income is below $80,000 ($160,000 for married couples filing a joint return).     
 
 
Beginning in 2011 brokers are now required to report cost basis for covered securities.  Gains or losses from the sale of stocks, bonds, mutual funds and other investment products will be detailed on the new Form 8949. Totals from Form 8949 will then be summarized on the Schedule D before being transferred to the Form 1040.

 
 
IRS has released the 2012 contribution limits for health savings account.  The Tax Information has been updated with the new 2011 and 2012 contribution limits.
 
 
Interest income is earned when individuals or institutions are given an opportunity to make use of your money for specified period of time.  Interest is taxed as ordinary income.  US Treasury and/or Saving Bond interest income is taxable on your federal return but might be tax-free on state level.   Municipal bonds will have different tax consequence on your federal and state returns.
 
 
In the past couple of weeks I have been getting this question not from the philosophical but from the financial point of view.  People are confused by what is called “marriage tax penalty”.  For example, if both of you make $65,000 per year, you might pay more as a married couple than you would as singles, even though you're talking about the same $130,000 of income.  Believe it or not, this was a much bigger concern before the 2003 Tax Act took effect.  However, this is still an issue and couples are, in some case, penalized as their income increases.
 
 
IRS issues 2011 vehicle depreciation dollar limits
The IRS has issued the limitations on depreciation deductions for owners of passenger automobiles, trucks and vans first "placed in service" (i.e. used) during the 2011 calendar year. The IRS also provided revised tables of depreciation limits for vehicles first placed in service (or first leased by a taxpayer) during 2010 and to which bonus depreciation applies.

Note. Bonus depreciation may not be applicable because, among other reasons, you purchased the vehicle used. You may elect out of bonus depreciation or elect to increase the alternative minimum tax (AMT) credit limit under Code Sec. 53 instead of claiming bonus depreciation.