April 30, 2003
What a Tax Season!!
First, Nadine Boodhoo left in February, which is too late to hire and train another individual, so we had to cover for her responsibilities. Then, February was too easy a month since too many tax clients decided to wait until March to come in. And come in you did, together with the clients who regularly arrive in March. Of course, that meant that I had to work several hours additional each day over my already stretched schedule. I was stretched to the limit and every minute of my time was even more precious than in prior years. So, if anybody thought I wasn’t talking to them because they are “just a small” client, please note that most of clients are “just a small client” and the problem was there was just so much of me to go around and because of the shift of February business into March I was spread thinner than ever before, since almost everyone only wants to speak to me. CPA Exam The future senior partner takes the CPA Exam in May. We wish her luck! Moving! We have been notified by the landlord that they will not be renewing our lease. So, we will be moving to another space somewhere nearby. Move date will be in the fall. We will keep you informed. · The institution of tax withholding for partnerships, LLCs, S corporations with non resident and C Corporation owners. These entities are required to withhold and remit estimated taxes on all income derived from New York sources. · Filing fees for LLC and LLPs are increased to $100 per member. The increases are payable at the end of each January. · The top income tax rate for individuals rises to 7.5%. Incomes above $500,000 rise to 7.7% · New York City raises its resident tax rate from 3.468% to 4.25% with incomes above $500,000 rising to 4.45%. · Nonresidents who sell New York State real estate other than a principal residence will be required to make estimated tax payments. · Sales taxes rise to 8.625% in New York City with the New York State portion of any other jurisdictions sales tax increasing by .25%. · New York will add a use tax line to its personal income tax return. Taxpayers must use this line to report unpaid state and local compensating use tax purchases made in person or by remote means, such as by mail order or the internet. Failure to answer this question in the affirmative will make most taxpayers guilty of perjury. Remember, while purchasing an item on the internet generally is free of sales tax because the seller is not required to collect it, the mere use of or presence in the state subjects the owner to a use tax. · The year round $110 New York State sales tax exemption on clothing and footwear is eliminated. In its place will be two seven day sales tax holidays. · There will be a New York City amnesty program scheduled to be held between July 1 and September 30, 2003. The program provides taxpayers with the opportunity to pay certain tax liabilities at a reduced interest rate, without penalties and civil, administrative and criminal actions. Finally!! The stock market appears to be recovering. Now is the time to review whether you should invest. Have you Gotten a Call From Your Broker Lately?? The Tax Court held that the father lost the exemption for the child because his ex did not sign Form 8332 or a court order with all the data contained on that form. She got the exemption although she ignored the terms of the court order. (Kiplinger Tax Letter 4/11/03) We advise you to have Howard Lisch Esq., CPA review any proposed divorce agreement for tax consequences. If you have any questions about the foregoing or any other financial matters, please call us. Remember, We’re Here For You!!
New New York State Tax Law
Concluding one of the most bizarre budget battles in New York’s history, a new tax law was passed over Governor Pataki’s vetoes. The relevant provisions are:
Brokers at USB Securities were informed that the bonuses they receive for assets under management were being cut as well as expense accounts. (Registered Representative January, 2003, p.22)
Be skeptical if you are getting an unsolicited and overdue call from your USB broker. Make sure the idea posed will help you as much as them.
Lack of a Form 8332 Cost a Non-Custodial Dad
A couple’s 1997 divorce gave custody of their child to the ex-wife but required her to sign a Form 8332 so the father could get the exemption. When she did not sign the form, he claimed the dependency exemption anyway.