February 15, 2006
New Six (6) Month Extension for 2005
The IRS has issued new temporary and proposed regulations that will allow most individuals and businesses to request a six (6) month automatic filing extension on a single form without a reason or even a signature for 2005 tax returns.
Remember, filing extensions does not extend the time for paying the tax and cannot be granted for more than six months, except for taxpayers who are abroad. The extension will be able to be used by individuals, partnerships, corporations, Real Estate Investment Conduits and certain trusts.
The new regulations may operate to increase the filing burden for partners. That`s because partnerships and individuals can qualify for a six month automatic extension undtil October 15 and corporations can qualify for an automatic extnesion unitl September 15. Thus, an individual or corporate partner may not receive K-1 information from the partnership before the individual`s or corporation`s extended due date. As a result, the partner may have to file using estimates of income and then file an amended return after it receives the K-1. Federal Taxes Weekly Alert 11/10/05
New York has adopted the automatic six month extension also.
2006 Cars Certified For Clean Fuel Deduction
Ford Explorer Hybrid Honda Insight
Mercury Mariner Hybrid Honda Civic Hybrid
Toyota Highlander Honda Accord Hybrid
Lexus RX 400L Ford Escape SUV
Toyota Prius
The deduction which may be taken whether or not the taxpayer itemizes, is $2,000 for a new vehicle placed into service in 2005. Federal Taxes Weekly Alert 11/10/05
Whose Money Is It Anyway?
In his final weeks in office, NJ Governor Codey used $910,000 from his special gubernatorial emergency fund to buy little league equipment, resurface tennis courts, build a pedestrian bridge, refurbish a clock tower, and subsidize Rutgers students attending the Insight Bowl in Arizona.
When asked about the propriety of such expenses, Codey answered that his predecessors did the same thing.
No wonder New Jersey faces a $5,000,000,000 budget deficit. Lets hope Corzine is a breath of fresh air. Forrester would have been. Asbury Park Press 1/15/06
NJ AG Peter Harvey Pays Criminals
Attorney General Peter C. Harvey spent $2,700,000 to create a voter registration campaign that featured Queen Latifah, Jadakess Phillips, Fat Joe Caragena and others who have had run ins with the law.
Any wonder New Jersey has a $5,000,000,000 budget deficit!
Do you think the current governor will cut spending or raise taxes?
Connecticut Estate & Gift Tax Changes
On June 30, 2005, Connecticut changed its law to require that Connecticut donors who make taxable gifts on or after January 1, 2005 shall have to file a gift tax return with the Department of Revenue Service even though no gift tax may be payable.
The representative of the estate of a decedent who died on or after January 1, 2005 must file a return with the Department of Revenue Service if the decedent`s Connecticut taxable estate is more than $2 million. www.ct.gov/drs
Tax Exempt Status Made Easier
The IRS has made applying for tax exempt status easier by revising Form 1023. An online version is in the works that will guide applicants through the 23 page form. It is expected to be ready by Spring, 2007. Kiplinger Tax letter 9/23/05
Warning For Partners Who Have IRAs
If, under state law, all partners are responsible for the debts of their firm, then the IRS can levy on any of their assets, including IRAs to collect the unpaid tax liability. However, if seized under such grounds, the 10% early withdrawal penalty will not apply. Young, D.C. NY
Some Estimated Tax Payments are Underwater
If you think you are affected, please call us. Kiplinger Tax Letter 9/23/05
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