Friday, November 29, 2013

Exercise the food away!!

This week marks the start of the annual eat-too-much and move-too-little holiday season, with its attendant declining health and surging regrets. But a well-timed new study suggests that a daily bout of exercise should erase or lessen many of the injurious effects, even if you otherwise lounge all day on the couch and load up on pie.
To undertake this valuable experiment, which was published online in The Journal of Physiology, scientists at the University of Bath in England rounded up a group of 26 healthy young men. All exercised regularly. None were obese. Baseline health assessments, including biopsies of fat tissue, confirmed that each had normal metabolisms and blood sugar control, with no symptoms of incipient diabetes.
The scientists then asked their volunteers to impair their laudable health by doing a lot of sitting and gorging themselves.
Energy surplus is the technical name for those occasions when people consume more energy, in the form of calories, than they burn. If unchecked, energy surplus contributes, as we all know, to a variety of poor health outcomes, including insulin resistance — often the first step toward diabetes — and other metabolic problems.
Overeating and inactivity can each, on its own, produce an energy surplus. Together, their ill effects are exacerbated, often in a very short period of time. Earlier studies have found that even a few days of inactivity and overeating spark detrimental changes in previously healthy bodies.
Some of these experiments have also concluded that exercise blunts the ill effects of these behaviors, in large part, it has been assumed, by reducing the energy surplus. It burns some of the excess calories. But a few scientists have suspected that exercise might do more; it might have physiological effects that extend beyond just incinerating surplus energy.
To test that possibility, of course, it would be necessary to maintain an energy surplus, even with exercise. So that is what the University of Bath researchers decided to do.
Their method was simple. They randomly divided their volunteers into two groups, one of which was assigned to run every day at a moderately intense pace on a treadmill for 45 minutes. The other group did not exercise.
Meanwhile, the men in both groups were told to generally stop moving so much, decreasing the number of steps that they took each day from more than 10,000 on average to fewer than 4,000, as gauged by pedometers. The exercising group’s treadmill workouts were not included in their step counts. Except when they were running, they were as inactive as the other group.
Both groups also were directed to start substantially overeating. The group that was not exercising increased their daily caloric intake by 50 percent, compared with what it had been before, while the exercising group consumed almost 75 percent more calories than previously, with the additional 25 percent replacing the energy burned during training.
Over all, the two groups’ net daily energy surplus was the same.
The experiment continued for seven days. Then both groups returned to the lab for additional testing, including new insulin measurements and another biopsy of fat tissue.
The results were striking. After only a week, the young men who had not exercised displayed a significant and unhealthy decline in their blood sugar control, and, equally worrying, their biopsied fat cells seemed to have developed a malicious streak. Those cells, examined using sophisticated genetic testing techniques, were now overexpressing various genes that may contribute to unhealthy metabolic changes and underexpressing other genes potentially important for a well-functioning metabolism.
But the volunteers who had exercised once a day, despite comparable energy surpluses, were not similarly afflicted. Their blood sugar control remained robust, and their fat cells exhibited far fewer of the potentially undesirable alterations in gene expression than among the sedentary men.
“Exercise seemed to completely cancel out many of the changes induced by overfeeding and reduced activity,” said Dylan Thompson, a professor of health sciences at the University of Bath and senior author of the study. And where it did not countermand the impacts, he continued, it “softened” them, leaving the exercise group “better off than the nonexercise group,” despite engaging in equivalently insalubrious behavior.
From a scientific standpoint, this finding intimates that the metabolic effects of overeating and inactivity are multifaceted, Dr. Thompson said, with an energy surplus sparking genetic as well as other physiological changes. But just how exercise countermands those effects is impossible to say based on the new experiment, he added. Differences in how each group’s metabolism utilized fats and carbohydrates could play a role, he said, as could the release of certain molecules from exercising muscles, which only occurred among the men who ran.
Of more pressing interest, though, is the study’s practical message that “if you are facing a period of overconsumption and inactivity” — also known as the holidays — “a daily bout of exercise will prevent many of the negative changes, at least in the short term,” Dr. Thompson said. Of course, his study involved young, fit men and a relatively prolonged period of exercise. But the findings likely apply, he said, to other groups, like older adults and women, and perhaps to lesser amounts of training. That’s a possibility worth embracing as the pie servings accumulate.

Tuesday, November 19, 2013

Th $500,000 Tax Break That's Disappearing by Year-End


The $500,000 Tax Break That's Disappearing By Year-End



Windows XP
(Photo credit: Wikipedia)
Congress extended bonus depreciation and more robust Section 179 expensing through year-end 2013 as part of last January’s fiscal cliff deal, and now as the deadline is approaching, small business owners are looking anew at capital purchases. If you’re on the border line of whether you’re going to make some capital asset acquisition this year or next, you might want to accelerate it into this year.
“Especially this year if there’s a major purchase, it makes sense to do it,” says Jennifer Prosperino, a CPA and tax principal with Berdon LLP in New York City. “With the uncertainty, why take your chances?”
Also, the additional deduction is especially valuable to those facing the new higher tax rates for 2013, including the Medicare surtax on wages and self-employment income, notes Mark Nash, a Dallas-based partner in PwC’s Private Company Services practice.
Under the law now, bonus depreciation ends Dec. 31, and Sec. 179 becomes way less powerful as of Jan. 1. The dollar limits for Sec. 179 expenses is scheduled to drop on Jan. 1 to $25,000 with a $200,000 investment ceiling (from $500,000 today, with a $2.5 million investment ceiling).
So you’re looking at a known $500,000 tax break for 2013 versus an unknown 2014 tax break.
That’s the sales pitch Jeff Connally, chief executive of IT service provider CMIT Solutions, says his franchise partners are using in their year-end sales pitches to small businesses. It coincides with another reason small businesses might need to upgrade their computer systems—Microsoft MSFT -1.24% has announced it will end support for its Windows XP operating system next spring. And off-the-shelf computer software is specifically included in the definition of property that counts for the enhanced deduction through 2013. “Forward thinking clients are making the transition now; why not capture a known tax advantage?” Connally says.
One client, James Caruolo, just inked a $15,000 purchase of computer hardware and software for his 7-person law firm in Warwick, R.I. “The fact that we could expense that out 100% this year was a huge selling point,” Caruolo says. “We see the advantage this year; we’re going to take it.”
Does it make sense to accelerate purchases that might be deductible next year? Generally if you have the income this year to offset, it’s better to take the deduction now. “If there’s room this year, you might as well take it,” Prosperino says, adding that you never know what expenses might come up next year.
Here are some details. Under Sec. 179, small business owners (that includes a self-employed consultant) can deduct the entire cost (100%) of up to $500,000 of new or used computer equipment, vehicles, furniture—most depreciable assets that have less than a 20-year life.
With bonus depreciation, a company can deduct half the cost of new capital purchases in the first year. It can still be more valuable than the Sec. 179 break because the Sec. 179 deduction is limited to business taxable income with any excess carried forward. But if you’re actively involved in running a business, you can not only claim losses generated by 50% bonus depreciation against other income but can also carry any still unused losses back for two years and get a refund check from Uncle Sam.
What’s up for next year? “It’s pretty clear that Congress won’t extend these breaks by the end of the year, and next year we could end up with a year like 2012 where we went the whole year before they were renewed,” says Mark Luscombe, a federal tax analyst for CCH, a Wolters Kluwer Wolters Kluwer business.
Keep an eye on Congress. There are bills on the table that would to extend 50% bonus depreciation for three years –and one that would make it applicable to “used” dairy producing calves and cows.

Sunday, November 3, 2013

The Impact of Obamacare on your 2013 Tax return filings

The Affordable Care Act may affect your 2013 taxes but TaxACT can help.
Doctor and patients
The most significant implications of the Patient Protection and Affordable Care Act of 2010, also known as “Obamacare,” are just around the corner. In addition to having wide-ranging effects on health insurance in 2014 and 2015, the legislation also impacts income taxes.
“Though the Affordable Care Act has implications on income taxes, you can still act confidently when preparing your tax return with an online solution,” says TaxACT spokesperson Jessi Dolmage. “The question and answer interview will cover all the tax law changes.”
The health care act included several tax law changes for 2013 federal income tax returns due April 15, 2014:
  • Employees will report the total amount paid by them and their employer for health insurance premiums, flexible spending beyond payroll deductions and other premiums, on their returns. “The amount is needed for health insurance changes; it doesn't impact your taxable income,” explains Dolmage. “Simply enter the amount in Box 12 with Code DD on your Form W-2 when prompted by the tax program.”
  • If you itemize deductions, the threshold for deducting medical expenses increases to 10 percent of your adjusted gross income (AGI). The threshold for taxpayers age 65 and older remains at 7.5 percent. The tax software will calculate the deduction after you enter your medical expenses.
  • A 3.8 percent tax on net investment income will apply to taxpayers at higher income levels based on filing status. Individuals and heads of household with an AGI of $200,000 plus, married couples filing separately with an AGI of $125,000 plus, and couples filing jointly with an AGI of $250,000 plus must pay the tax. Answer a few questions about investment income and your tax program will do the rest.
  • Taxpayers in those same AGI ranges will also pay an additional 0.9 percent Medicare tax on wages and compensation in excess of $200,000. The tax is automatically withheld from employee wages, with the total amount provided in Box 6 of your Form W-2. If you�re a business owner or self-employed, the tax is calculated using figures on your Schedule SE.
The health insurance requirement doesn't have tax implications for another year. If you have health insurance, your online tax solution will guide you through the simple process of reporting it on your 2014 tax return due April 2015. If you don't have health insurance for a total of three or more months in 2014, you may pay a penalty that's reported and calculated on your tax return. Tax programs will calculate the amount based on number of uninsured individuals in your household and household income.
Uninsured individuals can shop and apply for health insurance through online “marketplaces,” also called “exchanges,” starting Oct. 1. States will have their own marketplaces, use the federal government's Health Insurance Marketplace or a hybrid of the two. Enrollment closes March 31, 2014.
If you don't have access to minimum required employer-provided insurance and purchase insurance through a marketplace, you may qualify for an advanced premium tax credit applied directly to your monthly premiums. Eligibility and amount are based on the cost of marketplace premiums and your household size and income. If you do not take advantage of the advanced premium tax credit, you can still claim the refundable credit on your 2014 tax return. Cost-sharing subsidies may also be available for other health care expenses such as deductibles, copayments and coinsurance.