What to Do If You Are Missing a W-2

 

Have you received all of your W-2s? These documents are essential for completing individual tax returns. You should receive a Form W-2, Wage and Tax Statement, from all of your employers each year. Employers have until January 31st to provide or send you a 2012 W-2 earnings statement, either electronically or in paper form. If you have not received your W-2, follow these steps:

 

Contact Your Tax Preparer - And let him or her know that you are missing a W-2. If your appointment is in the near future, your preparer will advise you whether to keep the appointment or change it to another time. Generally, when a W-2 or 1099 is missing, it is best to keep the appointment so that everything else for the return can be completed. You can then mail the missing document to the office or drop it off at a later date. That way, your return can be finished as soon as the W-2 or 1099 is available, which will speed up your refund, if you are receiving one.

1. Contact Your Employer - Contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer due to an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for the employer to resend or re-issue the W-2.
2. Contact the IRS - If you still have not received your W-2 by February 15, you can contact the IRS for assistance at 800-829-1040. However, we recommend that you hold off from contacting the IRS until you are certain that you will not be receiving a W-2 from the employer. If and when you do call the IRS, have the following information at hand:
• Employer's name, address, city, and state, including zip code;
• Your name, address, city, state, zip code, and Social Security number; and
• An estimate of the wages you earned, the federal income tax withheld, and the period in which you worked for that employer. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible. This office can assist you with making the estimate.
3. File Your Return - Even if you don’t receive a W-2, you are still required to file your tax return or to request a filing extension by April 15.
• If you anticipate that you will ultimately receive the missing W-2, this office can estimate your 2012 tax liability and file extensions for you. If you have a substantial refund coming, you may opt to have this office prepare a substitute W-2, enabling you to file without the W-2. Refunds for returns, including substitute W-2s, can be delayed significantly while the IRS verifies the W-2 information.
• If you don’t anticipate receiving the missing W-2, then this office can prepare a substitute W-2, enabling you to file your 2012 tax return.

If a substitute W-2 is used and it is later determined that the information used to prepare the substitute W-2 was in error, an amended return may need to be prepared for you to be able to file.

Please call this office if you have questions or need assistance.

WEEKEND SOFTWARE VULNERABILITY AND PATCH REPORT

February 3, 2013

The following software vulnerabilities and updates were announced by Citadel Information Group.  They strongly recommend that readers update their computers and take other action as indicated.  This is from an e-mail received from Stan Stahl, Ph.D. [www.citadel-information.com] and posted with his approval.

Important Security Updates

Apple iOS: Apple has released iOS 6.1 for the iPhone 3 GS and later, iPod touch 4th generation and later, and iPad 2 and later to address multiple vulnerabilities. The update is available through iTunes.

Apple TV: Apple has released an update to fix a vulnerability in its TV. To update to version 5.2, select Settings > General > Update Software through the TV.

D-Link Wireless Camera: D-Link has released two updates to fix a moderately critical vulnerability in two of its cameras; DCS-930L and DCS-932L. The updates are available for DCS-930L and DCS-932L through D-Link's website.

Foxit PDF-Reader: Foxit has released version 5.4.5.0124 to fix a highly critical vulnerability. The update is available from Foxit's website.  

Java for Apple Mac OS X: Apple has released Java 1.6.0_37 for Mac OS X 10.6 Update 11 to fix at least 30 vulnerabilities, some of which are highly critical. Updates are available from Apple's website.

Opera: Opera Software has released version 12.13 of its Opera browser to correct highly critical vulnerabilities. The update is available from Opera Software's website.

Oracle Java: Oracle has released Java 7 Update 13 to fix at least 39 extremely critical vulnerabilities. Note: The original Critical Patch Update for Java SE - February 2013 was scheduled to be released on February 19th, but Oracle decided to accelerate the release of this Critical Patch Update because active exploitation "in the wild" of one of the vulnerabilities affecting the Java Runtime Environment (JRE) in desktop browsers, was addressed with this Critical Patch Update.

Current Software Versions

Adobe Flash 11.5.502.146 [Windows 7: IE9, Firefox, Mozilla, Netscape, Opera]

Adobe Flash 11.3.378.5 [Windows 8: IE]

Adobe Flash 11.5.502.146 [Macintosh OS X: Firefox, Opera, Safari]

Adobe Reader 11.0.0

Dropbox 1.6.11 [Citadel warns against relying on Dropbox security. We recommend files containing sensitive information be independently encrypted with a program like Axcrypt; encryption keys be at least 15 characters long; and the Dropbox password be at least 15 characters long and different from other passwords.]

Firefox 18.0.1 [Windows]

Google Chrome 24.0.1312.56

Internet Explorer 9.0.8112.16421 [Windows 7: IE], [See warning below]

Internet Explorer 10.0.9200.16466 [Windows 8: IE]

Java SE 7 Update 13 [Citadel recommends removing or disabling Java from your browser. Java is a major source of cyber criminal exploits. It is not needed for most internet browsing. If you have particular web sites that requires Java, Citadel recommends using a two-browser approach to minimize risk. If you normally browse the Web with Firefox, for example, disable the Java plugin in Firefox and use an alternative browser - such as Chrome, IE9, Safari, etc - with Java enabled to browse only the sites that require it.]

QuickTime 7.7.3 (1680.64)

Safari 5.1.7  [Windows, See warning below]

Safari 6.0.2 [Mac OS X]

Skype 6.1.0.129

Newly Announced Unpatched Vulnerabilities

Universal Plug and Play (UPnP): US-CERT and others have announced that multiple critical vulnerabilities have been found in the software used by Universal Plug and Play. Rapid7 offers a free scanner that checks whether one's network-enabled devices might be vulnerable to attack through the UPnP protocol. Rapid7s free scanning tool is available here. Cisco has acknowledged the problem in its Linksys routers here and its non-Linksys equipment here. Other router manufacturers have yet to comment. In line with industry recommendations, Citadel advises users to disable UPnP on endpoint devices that use the protocol on their internal network and on their Internet router. For ongoing information see the story on our Cyber Security News of the Week, February 3, 2013.

VLC Media Player: Secunia reports a highly critical vulnerability in VLC's Media player, version 2.05 and prior. No patch is available at this time.

For Your IT Department

Cisco Multiple Products: Cisco has released updates for multiple products, including its NAC appliance, IOS XR, Adaptive Security Appliances (ASA), WebEx Social and others. Apply appropriate updates.

Novell GroupWise Client: Secunia reports at least 2 highly critical vulnerabilities in Novell's GroupWise Client. Update to version 8.0.3 Hot Patch 2 (or later) or 2012 SP1 Hot Patch 1.

Oracle JavaFX: Secunia reports at least 13 highly critical vulnerabilities in Oracle's JavaFX. Update to version 2.2.5.

VMWare: Secunia reports moderately critical vulnerabilities in several of VMWare's products, including vSphere, ESXi, ESX Server and others. Apply appropriate patches and partial fixes.

Wireshark: Secunia reports at least 19 vulnerabilities, some of which are highly critical in Wireshark's product. Update to version 1.8.5 or 1.6.13.

Important Unpatched Vulnerabilities

Android Browser: Secunia reports a less critical vulnerability in the Android browser that can be exploited to trick a user into believing he is connected to a trusted site by including the trusted site in an iframe. The vulnerability is confirmed in Browser version 2.3.3 included in Android version 2.3.3 and Browser version 3.2 included in Android version 3.2. Other versions may also be affected. Users are cautioned to not rely on displayed certificate information. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, December 25, 2011.

AOL downloadUpdater2 Firefox Plugin: Secunia reports a highly critical vulnerability in version 1.3.0.0. Other versions may also be affected. No solution is currently available. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, August 12, 2012.

Apple Safari for Windows: Secunia reports a moderately critical vulnerability in Apple's Safari version 5.1.2 (7534.52.7) on Windows using the RealPlayer and Adobe Flash plug-ins. Other versions may also be affected. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, March 11, 2012.

Apple Safari for Windows: Secunia reports a non-critical unpatched vulnerability in Safari 5.1.2. Other versions may also be affected. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, December 25, 2011.

HTC Mobile Devices: The security vulnerability in the default Twitter application (Peep) in HTC products remain unpatched. Readers should refrain from using the default Twitter application (Peep). We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, February 11, 2011. 

HTC Touch2: The highly critical 0-day vulnerability in the HTC Touch2 VideoPlayer remains unpatched. Users are advised to not open files from untrusted sources. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, December 18, 2011.

Microsoft Windows XP: A less-critical security vulnerability has been found in Windows XP which can be exploited by malicious, local users to disclose potentially sensitive information or cause a DoS (Denial of Service). No patch is available at this time. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, August 7, 2011.

Microsoft Word: A highly critical vulnerability has been found in Microsoft Word XP and 2002. No patch is available at this time. Readers should refrain from opening untrusted files in these earlier versions of Word. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, June 19, 2011.

Microsoft Reader: The highly critical vulnerability in Microsoft Reader, versions 2.x, remains unpatched.  Readers should refrain from opening untrusted files in Reader. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, April 15, 2011.

PDF-Pro: Several highly critical vulnerabilities in PDF-Pro, a popular alternative to Adobe Acrobat, remain unpatched. Readers should refrain from opening untrusted files in PDF-Pro. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, March 4, 2011.

Quick View Plus CorelDRAW: A highly critical vulnerability has been found in Quick View Plus which can be exploited by malicious people to compromise a user's system. Users should not view untrusted CDR files in Quick View Plus. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, July 31, 2011.

Samsung / Dell Printers: Secunia reports a moderately critical security issue in Samsung's ML-2580 and ML-4050 Monochrome Laser Printers and Dell's 2145cn and 2335dn Multifunction Printers. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, December 2, 2012.

Samsung Galaxy S III: Secunia reports two highly critical vulnerabilities in the Galaxy S3 device. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, October 14, 2012.

Symantec pcAnywhere: As we reported in our Cyber Security News of the Week, January 29, 2012, Symantec has confirmed that the hacker group Anonymous stole source code from the 2006 versions of several Norton security products and the pcAnywhere remote access tool. Symantec has advised users to disable pcAnywhere because of the theft of the pcAnywhere source code.

VLC Media Player: As we reported in our Cyber Security News of the Week, December 16, 2012, Secunia reports a highly critical vulnerability in the VLC Media Player. No patch is available at this time.

ACD Systems: Citadel recommends users remove all ACD Systems programs from their computers. ACD Systems has failed to patch significant critical vulnerabilities in their programs dating back more than a year. Consequently Citadel recommends users remove all ACD Systems programs from their computers until the company fixes these vulnerabilities and pays proper attention to the implications of their security vulnerabilities in opening doors to cyber criminals . The community cannot tolerate a head-in-the-sand attitude, whether by developers or the people who purchase and use their programs. The consequences of willful ignorance are too grave.

• ACD Systems Canvas: Secunia reports at least 13 highly critical unpatched vulnerabilities in ACD Systems Canvas version 14. See Weekend Vulnerability and Patch Report, August 5, 2012.
• ACDSee 14.x: Secunia reports a highly critical unpatched vulnerability in ACDSee. See Weekend Vulnerability and Patch Report, February 19, 2012.
• ACDSee Photo: Several highly critical unpatched vulnerabilities have been identified in various ACDSee photo products. Vulnerabilities have been identified in FotoSlate, Photo Editor 2008, and Picture Frame Manager. See Weekend Vulnerability and Patch Report, June 12, 2011. See also Weekend Vulnerability and Patch Report, September 18, 2011 where we alerted readers to a second vulnerability in FotoSlate.
• ACD Systems Canvas CorelDRAW: A highly critical unpatched vulnerability has been found in ACD Systems Canvas which can be exploited by malicious people to compromise a user's system.. See Weekend Vulnerability and Patch Report, July 31, 2011.

If you are responsible for the security of your computer, Citadel's Weekend Vulnerability and Patch Report is for you. We strongly urge you to take action to keep your workstation patched and updated.

If someone else is responsible for the security of your computer, forward our Weekend Vulnerability and Patch Report to them and follow up to make sure your computer has been patched and updated.

Vulnerability management is a key element of cyber security management. Cyber criminals take over user computers by writing computer programs that "exploit" vulnerabilities in operating systems (Windows, Apple OS, etc) and application programs (Adobe Acrobat, Office, Flash, Java, etc). When software companies find a vulnerability, they usually issue an update patch to fix the code running in their customer's computers.

Citadel publishes our Weekend Vulnerability and Patch Report to alert readers to some of the week's important updates and vulnerabilities. Our focus is on software typically found in the small or home office (SOHO) or that users are likely to have on their home computer. The report is not intended to be a thorough listing of updates and vulnerabilities.

.

Copyright © 2013 Citadel Information Group. All rights reserved.

 

WEEKEND SOFTWARE VULNERABILITY AND PATCH REPORT

January 27, 2013

The following software vulnerabilities and updates were announced by Citadel Information Group.  They strongly recommend that readers update their computers and take other action as indicated.  This is from an e-mail received from Stan Stahl, Ph.D. [www.citadel-information.com] and posted with his approval.

Imporant Security Updates

Google Chrome: Google has released Chrome, version 24.0.1312.56. to fix at least 5 highly critical vulnerabilities. Updates are available through the program or from Chrome's website.

Linksys WRT54GL Wireless Router: Linksys has released and update to its WRT54GL Wireless Router. Update to firmware version 4.30.16 by downloading from the Linksys website.

Current Software Versions

Adobe Flash 11.5.502.146 [Windows 7: IE9, Firefox, Mozilla, Netscape, Opera]

Adobe Flash 11.3.378.5 [Windows 8: IE]

Adobe Flash 11.5.502.146 [Macintosh OS X: Firefox, Opera, Safari]

Adobe Reader 11.0.01

Dropbox 1.6.11 [Citadel warns against relying on Dropbox security. We recommend files containing sensitive information be independently encrypted with a program like Axcrypt; encryption keys be at least 15 characters long; and the Dropbox password be at least 15 characters long and different from other passwords.]

Firefox 18.0.1 [Windows]

Google Chrome 24.0.1312.56

Internet Explorer 9.0.8112.16421 [Windows 7: IE], [See warning below]

Internet Explorer 10.0.9200.16466 [Windows 8: IE]

Java SE 7 Update 11 [Citadel recommends removing or disabling Java from your browser. Java is a major source of cyber criminal exploits. It is not needed for most internet browsing. If you have particular web sites that requires Java, Citadel recommends using a two-browser approach to minimize risk. If you normally browse the Web with Firefox, for example, disable the Java plugin in Firefox and use an alternative browser - such as Chrome, IE9, Safari, etc - with Java enabled to browse only the sites that require it.]

QuickTime 7.7.3 (1680.64)

Safari 5.1.7  [Windows, See warning below]

Safari 6.0.2 [Mac OS X]

Skype 6.1.0.129

For Your IT Department

Cisco Wireless LAN Controllers: Secunia reports vulnerabilities in multiple Cisco Wireless LAN Controllers. Apply applicable updates.

Google Web Toolkit: Secunia reports a vulnerability in Google's Web Toolkit. Update to version 2.5 GA.

PDF-XChange Viewer: Secunia reports a highly critical vulnerability in PDF-XChange Viewer. Update to version 2.5 Build 208.0.

Sourcefire Snort: Secunia reports a moderately critical vulnerability in Sourcefire's Snort. Update Snort rules to a version released on 2013-01-17 or later.

WordPress: Secunia reports at least 37 moderately critical vulnerabilities in WordPress. Update to version 3.5.1. There are also plugin vulnerabilities for updates.

Important Unpatched Vulnerabilities

Android Browser: Secunia reports a less critical vulnerability in the Android browser that can be exploited to trick a user into believing he is connected to a trusted site by including the trusted site in an iframe. The vulnerability is confirmed in Browser version 2.3.3 included in Android version 2.3.3 and Browser version 3.2 included in Android version 3.2. Other versions may also be affected. Users are cautioned to not rely on displayed certificate information. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, December 25, 2011.

AOL downloadUpdater2 Firefox Plugin: Secunia reports a highly critical vulnerability in version 1.3.0.0. Other versions may also be affected. No solution is currently available. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, August 12, 2012.

Apple Safari for Windows: Secunia reports a moderately critical vulnerability in Apple's Safari version 5.1.2 (7534.52.7) on Windows using the RealPlayer and Adobe Flash plug-ins. Other versions may also be affected. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, March 11, 2012.

Apple Safari for Windows: Secunia reports a non-critical unpatched vulnerability in Safari 5.1.2. Other versions may also be affected. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, December 25, 2011.

CA ARCserve Backup: Secunia reports a less critical vulnerability in CA's ARCserver Backup in versions 12.0, 12.5, 15, and 16. CA provides a partial fix solution and advises updating to a fixed version. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, March 25, 2012.  

HTC Mobile Devices: The security vulnerability in the default Twitter application (Peep) in HTC products remain unpatched. Readers should refrain from using the default Twitter application (Peep). We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, February 11, 2011.

HTC Touch2: The highly critical 0-day vulnerability in the HTC Touch2 VideoPlayer remains unpatched. Users are advised to not open files from untrusted sources. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, December 18, 2011.

McAfee SaaS: The highly critical vulnerability in McAfee SaaS Endpoint Protection  remains unpatched. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, January 22, 2012.  

Microsoft Windows XP: A less-critical security vulnerability has been found in Windows XP which can be exploited by malicious, local users to disclose potentially sensitive information or cause a DoS (Denial of Service). No patch is available at this time. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, August 7, 2011.

Microsoft Word: A highly critical vulnerability has been found in Microsoft Word XP and 2002. No patch is available at this time. Readers should refrain from opening untrusted files in these earlier versions of Word. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, June 19, 2011.

Microsoft Reader: The highly critical vulnerability in Microsoft Reader, versions 2.x, remains unpatched.  Readers should refrain from opening untrusted files in Reader. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, April 15, 2011.

PDF-Pro: Several highly critical vulnerabilities in PDF-Pro, a popular alternative to Adobe Acrobat, remain unpatched. Readers should refrain from opening untrusted files in PDF-Pro. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, March 4, 2011.

Quick View Plus CorelDRAW: A highly critical vulnerability has been found in Quick View Plus which can be exploited by malicious people to compromise a user's system. Users should not view untrusted CDR files in Quick View Plus. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, July 31, 2011.

Samsung / Dell Printers: Secunia reports a moderately critical security issue in Samsung's ML-2580 and ML-4050 Monochrome Laser Printers and Dell's 2145cn and 2335dn Multifunction Printers. We first alerted readers to this vulnerability in Weekend Vulnerability and Patch Report, December 2, 2012.

Samsung Galaxy S III: Secunia reports two highly critical vulnerabilities in the Galaxy S3 device. We first alerted readers tothis vulnerability in Weekend Vulnerability and Patch Report, October 14, 2012.

Symantec pcAnywhere: As we reported in our Cyber Security News of the Week, January 29, 2012, Symantec has confirmed that the hacker group Anonymous stole source code from the 2006 versions of several Norton security products and the pcAnywhere remote access tool. Symantec has advised users to disable pcAnywhere because of the theft of the pcAnywhere source code.

VLC Media Player: As we reported in our Cyber Security News of the Week, December 16, 2012, Secunia reports a highly critical vulnerability in the VLC Media Player. No patch is available at this time.

ACD Systems: Citadel recommends users remove all ACD Systems programs from their computers. ACD Systems has failed to patch significant critical vulnerabilities in their programs dating back more than a year. Consequently Citadel recommends users remove all ACD Systems programs from their computers until the company fixes these vulnerabilities and pays proper attention to the implications of their security vulnerabilities in opening doors to cyber criminals . The community cannot tolerate a head-in-the-sand attitude, whether by developers or the people who purchase and use their programs. The consequences of willful ignorance are too grave.

• ACD Systems Canvas: Secunia reports at least 13 highly critical unpatched vulnerabilities in ACD Systems Canvas version 14. See Weekend Vulnerability and Patch Report, August 5, 2012.
• ACDSee 14.x: Secunia reports a highly critical unpatched vulnerability in ACDSee. See Weekend Vulnerability and Patch Report, February 19, 2012.
• ACDSee Photo: Several highly critical unpatched vulnerabilities have been identified in various ACDSee photo products. Vulnerabilities have been identified in FotoSlate, Photo Editor 2008, and Picture Frame Manager. See Weekend Vulnerability and Patch Report, June 12, 2011. See also Weekend Vulnerability and Patch Report, September 18, 2011 where we alerted readers to a second vulnerability in FotoSlate.
• ACD Systems Canvas CorelDRAW: A highly critical unpatched vulnerability has been found in ACD Systems Canvas which can be exploited by malicious people to compromise a user's system.. See Weekend Vulnerability and Patch Report, July 31, 2011.

If you are responsible for the security of your computer, our weekly report is for you. We strongly urge you to take action to keep your workstation patched and updated.

If someone else is responsible for the security of your computer, forward our Weekend Vulnerability and Patch Report to them and follow up to make sure your computer has been patched and updated.

Vulnerability management is a key element of cyber security management. Cyber criminals take over user computers by writing computer programs that "exploit" vulnerabilities in operating systems (Windows, Apple OS, etc) and application programs (Adobe Acrobat, Office, Flash, Java, etc). When software companies find a vulnerability, they usually issue an update patch to fix the code running in their customer's computers.

Citadel publishes our Weekend Vulnerability and Patch Report to alert readers to some of the week's important updates and vulnerabilities. Our focus is on software typically found in the small or home office (SOHO) or that users are likely to have on their home computer. The report is not intended to be a thorough listing of updates and vulnerabilities.

Prepared for the New Surtax?

As part of Obama Care, we have a new tax beginning in 2013. The official name of this tax is the “Unearned Income Medicare Contribution Tax,” and even though the name implies it is a contribution, don't get the idea you deduct it as a charitable contribution. It is, in actuality, a surtax levied on the net investment income of higher-income taxpayers.

The surtax is 3.8% on the lesser of your net investment income or the excess of your modified adjusted gross income (MAGI) over a threshold based on your filing status. MAGI is your regular AGI increased by income excluded for working out of the country; net investment income is your investment income reduced by investment expenses.

The filing status threshold amounts are:

·  $250,000 for married taxpayers filing jointly and surviving spouses.

·  $125,000 for married taxpayers filing separately.

·  $200,000 for single and head of household filers.

Example - A single taxpayer has net investment income of $100,000 and MAGI of $220,000. The taxpayer would pay a Medicare contribution tax only on the $20,000 amount by which his MAGI exceeds his threshold amount of $200,000, because that is less than his net investment income of $100,000. Thus, the taxpayer's Medicare contribution tax would be $760 ($20,000 × 3.8%).

Investment income includes:

·  Interest, dividends, annuities (but not distributions from IRAs or qualified retirement plans), and royalties,

·  Rents (other than derived from a trade or business),

·  Capital gains (other than derived from a trade or business),

·  Home sale gain in excess of the allowable home gain exclusion,

·  Your child's investment income in excess of the excludable threshold if, when eligible, you elect to include your child's investment income on your return,

·  Trade or business income that is a Sec. 469 passive activity with respect to the taxpayer, and

·  Trade or business income with respect to trading financial instruments or commodities.

Planning Note: for surtax purposes, gross income doesn't include interest on tax-exempt bonds. Thus, one can avoid the net investment income surtax by investing in tax-exempt bonds.

Investment expenses include:

·  Investment interest expense,

·  Investment advisory and brokerage fees,

·  Expenses related to rental and royalty income, and

·  State and local income taxes properly allocable to items included in Net Investment Income.

Do you think you will never get hit with this tax because your income is way under the threshold amounts? Don't be so sure. When you sell your home, the gain is a capital gain, and to the extent that the gain is not excludable using the home gain exclusion, it will add to your income, and possibly push you above the taxation thresholds. And, since capital gains are investment income, you might be in for a surprise. The same holds true for gains from selling stock and a second home. So when planning to sell a capital asset, be sure to consider the impact of this new surtax.

The surtax also applies to undistributed net investment income of trusts and estates, and there are special rules applying to the sale of partnership and Sub-S Corporation interests.

If this surtax will apply to you in 2013, you may need to increase your income tax withholding or estimated tax payments to cover the additional tax so you can avoid or minimize an underpayment of estimated tax penalty when you file your 2013 return.

If you have questions about this new tax or wish to do some related tax planning, please give this office a call.