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A SELECTION OF NEW TAX RULES, CHANGES ETC. WHICH MAY BE OF PRACTICAL SIGNIFICANCE TO OUR CLIENTS - Updated January 2006 IRS Issues New IRA Disclaimer Rules A new Revenue Ruling allows a beneficiary to withdraw the year of death required distribution from an inherited IRA account and later disclaim the balance of the IRA, as long as all the disclaimer rules are satisfied. One of the important rules is that if the beneficiary does wish to disclaim he/she must do so within 9 months of the deceased's date of death. IRS Announces Six-Month Automatic Filing Extensions for 2005 Form 1040 Beginning with 2005 returns due in 2006, all extensions will be automatic and they will be for six months. The IRS has abolished the two-step process. Individuals will continue to file Form 4868 but they will no longer have to file Form 2688 and give an explanation of why they need more time. 2006 Standard Mileage Rates
Final Roth 401(k) Regulations Arrive Just in Time for Debut of Accounts Beginning January 1, 2006 employers can offer a new retirement savings option: Roth 401(k)s. Like a Roth IRA, contributions to a Roth 401(k) are made with after-tax funds. Earnings in, and qualified distributions from, a Roth 401(k) are tax-free. While only employers can authorize 401(k) plans to offer the Roth option, only employee-share contributions get Roth treatment. Designated Roth contributions are limited to a participant's elective deferrals. Employer-matching contributions and non-elective contributions may not be designated as after-tax Roth contributions. Gift Tax Exclusion Increases to $12,000 Effective January 1, 2006 the annual gift tax exclusion increases from $11,000 to $12,000.
CONTINUING EDUCATION REQUIREMENTS The California State Board of Accountancy requires, as a condition of active license renewal, that a CPA licensee completes at least 80 hours of qualifying continuing education every two years. 24 of the 80 hours must be in the area of "Accounting and Auditing", and once very 6 years, an 8-hour Ethics class is required. This is a strict requirement for licensed CPAs, but we also provide the opportunity for and encourage unlicensed members of our staff to attend such courses. At Wain, Samuel we complete more than the minimum requirements, not only to satisfy our license renewal conditions, but also to keep abreast of new developments and take courses relevant to the needs of our firm and its clients. Following is a listing of qualifying courses attended during the last 12 months: 01/04/05: 2004-2005 Spidell Tax Update Seminar Ð attended by Mark Setzen and Linda Macedo 01/24/05: Ethics, Taxes and Financial Reporting Ð attended by Mark J. Setzen 07/20/05: Estate Planning Conference Ð attended by Tom Friebel 07/25/05: Flow-Through Entities Conference - attended by Tom Friebel 08/03/05: Compilation and Review: Current Issues Ð attended by Mark J. Setzen 09/20/05: Retirement Plans Conference - attended by Tom Friebel 10/20/05: Accounting and Auditing Conference - attended by Tom Friebel 11/10/05: Excel for the Accounting Professional Ð attended by Mark J. Setzen 11/11/05: Planning for Sec. 1031 Exchanges Ð attended by Mark J. Setzen 11/16/05: Tax Update and Planning Conference (2 days) - attended by Tom Friebel 12/07/05: SpidellÕs 2005 Federal and California Tax Seminars Ð attended by Tom Richards 12/08/05: International Tax Conference Ð attended by Mark J. Setzen 12/14/05: Real Estate Conference Ð attended by Mark J. Setzen We invite you to contact us if you have questions in these or other areas.
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