U.S. taxpayers are required to report their worldwide income, that is, income from both US and foreign sources. In addition, taxpayers who have an interest in, or signature or other authority over, a financial account in a foreign country such as a bank account, securities account, or other financial account are required to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if the aggregate value of all such financial accounts exceeds $10,000 at any time during the calendar year. The FBAR is not filed with your tax return. Instead, it is filed with the Department of the Treasury in Detroit, Michigan, no later than June 30 of the year following the calendar year reported.

Failure to report income in foreign bank accounts, or to file the FBAR, carries serious consequences, including large monetary penalties and, in some cases, criminal penalties.

If you have foreign bank accounts and are unsure whether you are required to file the FBAR, we would be happy to review your portfolio and advise you.


Each year the IRS adjusts certain tax numbers for inflation and tax law changes. Here are some of the adjusted numbers youll need for your 2012 tax planning.

• Standard mileage rate for business driving remains at 55.5 a mile. Rate for medical and
  moving mileage decreases to 23 a mile. Rate for charitable driving remains at 14 a
  mile.

• Section 179 maximum first-year expensing deduction decreases to $139,000, with a
  phase-out threshold of $560,000.

• Transportation fringe benefit limit decreases to $125 for vehicle/transit passes and
  increases to $240 for qualified parking.

• Social security taxable wage limit increases to $110,100. Retirees under full retirement
  age can earn up to $14,640 without losing benefits.

• Kiddie tax threshold remains at $1,900 and applies up to age 19 (up to age 24 for full-
  time students).

• Nanny tax threshold increases to $1,800.

• Health savings account (HSA) contribution limit increases to $3,100 for individuals and to
  $6,250 for families. An additional $1,000 may be contributed by those 55 or older.

• 401(k) maximum salary deferral increases to $17,000 ($22,500 for 50 and older).

• SIMPLE maximum salary deferral remains at $11,500 ($14,000 for 50 and older).

• IRA contribution limit remains at $5,000 ($6,000 for 50 and older).

• Estate tax top rate remains at 35%, and the exemption amount increases to $5,120,000.

• The annual gift tax exclusion remains at $13,000.

• Adoption tax credit decreases to $12,650 for adoption of an eligible child.