With many taxpayers focusing on the federal laws and the uncertainty of whether the Bush Tax Cuts will vanish at the end of the year, some North Carolina taxpayers may have missed an opportunity in North Carolina. North Carolina has a new deduction of up to $50,000 of net business income included in Adjusted Gross Income as long as the income is not considered passive. In the case of a married couple filing a joint return where both have net business income, the maximum dollar amount applies separately to each spouse and the total deduction can not exceed $100,000. The net business income that is not considered passive is the aggregate of all business income and losses. So while no one knows for sure what the elected officials in Washington will do with our federal laws, at least North Carolina has passed a meaningful law that will benefit many business owners and self-employed individuals in North Carolina.
November 13-14, 2012
McKimmon Conference & Training Center
NC State University, Raleigh NC
NC State University presents effective investments and tax planning ideas for utilizing tax laws to your advantage for certified public accountants, investors, tax planners, and owners of closely held businesses.
One of several presenters, Sandra M. Clark, an attorney and CPA with the Raleigh law firm Manning Fulton, will discuss ’Estate Planning and Probate Issues’ including:
- The effect the changing tax laws will have on an estate and estate planning
- The facts and myths or probate
- Strategies for developing the desired estate plan for clients
- Combining estate planning objectives with asset protection,business planning, elder law, and Medicaid issues
Why You Should Attend
You will be exposed to a broad range of important topics in a two-day span. You will gain a valuable knowledge of the tax laws that govern you, making you aware of excellent opportunities that are available under these rules, while assisting you in developing a list of crucial items you will want to discuss with your advisors or clients.
There are no prerequisites or advanced preparation for this course. Any investor or tax professional who wants to apply the current tax reform and investment concepts and practices to improve and enhance their professional skills will benefit.
Click here for a complete list of topics and seminar brochure.
If you’re one of those who wait until the last minute to file your taxes, rest easy. You have a few extra days this year. Since April 15th falls on a Sunday and April 16th is ‘Emancipation Day’, the deadline for filing 2011 tax returns has been extended until Tuesday, April 17th. For those of you wondering about Emancipation Day and how it relates to the tax deadline, it’s a holiday observed in the District of Columbia. According to federal law, District of Columbia holidays impact tax deadlines in the same way as federal holidays do. Trust returns may be extended until September 17, 2012 and individual returns may be extended until October 15, 2012.
You won’t hear me complaining about the extension. As a matter of fact, I used those two extra days to justify a recent fun filled mini-vacation to the lake with my family. No complaints there either. As a tax lawyer and CPA, spending a few days away from numbers and dollar signs was quite refreshing. My husband, son and nephew are still talking about the 55 pound catfish they caught. My guess is they’ll be talking about that for a while.
The North Carolina Department of Revenue has made it easier for individuals and businesses to resolve tax obligations with the State. The Voluntary Disclosure Program (VDP) has designed to promote compliance among taxpayers that come forward and file necessary tax returns and pay taxes that are due. In exchange for taxpayers voluntarily coming forward, the North Carolina Department of Revenue will waive penalties in certain circumstances. To qualify taxpayers must pay file past due returns and pay taxes for the past 3 years. Information on eligibility and filing is on the Department of Revenue’s website: www.dornc.com/practitioner/voluntary.html
IRS recently issued its annual data book, which provides statistical data on its 2011 audit activities. The IRS examined approximately 1.1% of tax returns filed in 2011 which is roughly the same as 2010 audits. Seventy five percent of the audits were correspondence audits and twenty-five percent were examination audits. For returns showing income of $200,000 to $1 million, 3.6% of returns showing business activity were audited. The audit rate for such returns was higher than the 2.5% and 2.9% respective rates for the previous year. In 2011, the audit rate for returns with total positive income of $1 million or more was 12.5% which was an increase from the 8.4% audit rate in 2010. Most of the higher income taxpayer audits were examination audits.
In regard to corporate returns other than S Corporation returns the audit rate was 1.5% in 2011. S corporation audit rate was .4%. For large corporations with total assets in excess of $10 million, the overall audit rate was 17.6%.
In 2011 the IRS assessed $28.75 million in civil penalties against individual taxpayers, up from $27.1 million in civil penalties assessed in the previous year. In regard to the penalties 58.6% were for failure to pay, 25.6% for underpayment of estimated tax, and 13% for delinquency. The IRS initiated 4,720 criminal investigations in 2011 of which 3,410 were referred for prosecution and 2,350 in convictions. Of those sentenced, 81.7% were incarcerated which includes imprisonment, home confinement, and electronic monitoring.