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357 Marion Avenue P.O. Box 1313 Mansfield, OH 44901 Telephone +1.419.522.1111 Fax +1.419.525.4646 secpas.com |
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Campbell-Rose & Company CPA's News 12.18.09 Beginning Jan. 1, 2010 paid tax preparers in Ohio who filed more than 75 tax returns during the 2008 calendar year (or any year after) must electronically file their client’s state income tax returns. 12.09.09 Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
A new law that went into effect Nov. 6 extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers. The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase. 11.11.09 Nonbusiness Energy Property Credit This credit equals 30 percent of what a homeowner spends on eligible energy-saving improvements, up to a maximum tax credit of $1,500 for the combined 2009 and 2010 tax years. The cost of certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass all qualify, along with labor costs for installing these items. In addition, the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs also qualify for the credit, though the cost of installing these items does not count. By spending as little as $5,000 before the end of the year on eligible energy-saving improvements, a homeowner can save as much as $1,500 on his or her 2009 federal income tax return. Due to limits based on tax liability, other credits claimed by a particular taxpayer and other factors, actual tax savings will vary. These tax savings are on top of any energy savings that may result. Residential Energy Efficient Property Credit Homeowners going green should also check out a second tax credit designed to spur investment in alternative energy equipment. The residential energy efficient property credit, equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. Generally, labor costs are included when calculating this credit. Also, no cap exists on the amount of credit available except in the case of fuel cell property. Not all energy-efficient improvements qualify for these tax credits. For that reason, homeowners should check the manufacturer’s tax credit certification statement before purchasing or installing any of these improvements. The certification statement can usually be found on the manufacturer’s website or with the product packaging. Normally, a homeowner can rely on this certification. The IRS cautions that the manufacturer’s certification is different from the Department of Energy’s Energy Star label, and not all Energy Star labeled products qualify for the tax credits. Eligible homeowners can claim both of these credits when they file their 2009 federal income tax return. Because these are credits, not deductions, they increase a taxpayer’s refund or reduce the tax he or she owes. An eligible taxpayer can claim these credits, regardless of whether he or she itemizes deductions on Schedule A. Use Form 5695, Residential Energy Credits, to figure and claim these credits. A draft version of this form is available now on IRS.gov. 10.19.2009 IRS Announces Pension Plan Limitations for 2010 The limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) will be $16,500 for 2010, which is the same amount as for 2009. This limitation affects elective deferrals to Section 401(k) plans and to the Federal Government’s Thrift Savings Plan, among others. By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits are subject to inflation adjustments each year, but because recent inflation factors have been minimal, many of these benefits will remain unchanged or change only slightly for 2010. 04.13.2009 Taxpayers who find they can’t make a full payment by the April 15 deadline may consider applying for an installment agreement. An installment agreement allows taxpayers to pay any remaining balance in monthly installments. Taxpayers who owe $25,000 or less may apply for a payment plan electronically, using the Online Payment Agreement application. Or they may attach Form 9465, Installment Agreement Request, to the front of their tax return. Taxpayers must show the amount of their proposed monthly payment and the date they wish to make their payment each month. The IRS charges $105 for setting up the agreement or $52 if the payments are deducted directly from the taxpayer’s bank account ($43 for qualified lower-income taxpayers). The IRS will automatically give taxpayers the low income installment agreement fee if they qualify. The taxpayer does not have to request it. Taxpayers are required to pay interest plus a late payment penalty on the unpaid taxes for each month or part of a month after the due date that the tax is not paid. A taxpayer who does not file the return by the due date — including extensions — may have to pay a failure-to-file penalty. 04.06.2009 The Recovery Act includes deducting state and local sales and excise taxes paid on the purchase of a new car, light truck, motor home or motorcycle. 03.30.2009 Every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 when they file their tax return next year. For a married couple, the exclusion applies to each spouse separately. 03.03.2009 Taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 may claim the tax credit either on their 2008 tax returns due April 15, or on their 2009 tax returns next year. They could get up to $8,000. 02.23.2009 Recovery Act Highlights
02.02.2009 Many of your investor clients will receive their year-end tax statements later than in past years. A law enacted last fall changed the deadline from Jan. 31 to Feb. 15, when brokers, including brokerage firms, mutual fund companies and barter exchanges, must furnish year-end Forms 1099-B to their customers. 01.06.2009 RECOVERY REBATE CREDIT The recovery rebate credit is a one-time benefit for people who didn't receive the full economic stimulus payment last year and whose circumstances may have changed, making them eligible now for some or all of the unpaid portion. Generally, a credit adds to the amount of a tax refund or decreases the amount of taxes owed. Therefore, the amount you receive for the recovery rebate credit will be included as part of your refund, as shown on your tax return. Unlike the 2008 economic stimulus payment, it will not be issued as a separate check. People who fall into the categories described below may be eligible for the recovery rebate credit this year:
You need to claim the recovery rebate credit on Form 1040, 1040A or 1040EZ. Unlike the economic stimulus payment, the recovery rebate credit will be included in your tax refund for 2008 and will not be issued as a separate payment. 01.05.2009 Personal property tax returns are a thing of the past beginning in 2009. For 2009, most corporations will file their final Ohio franchise tax return. 2009 is the fourth of five year personal Ohio State income tax reduction. Ohio income taxes will be reduced 4.2% this year. 12.29.2008 Ohio’s minimum wage increases from $7.00 per hour to $7.30 per hour on Jan. 1, 2009 for non-tipped employees and from $3.50 per hour to $3.65 per hour for tipped employees, plus tips. The increased minimum wage will apply to employers who gross more than $267,000 per year. In 2008, Ohio’s minimum wage had applied to employers who gross over $255,000 per year. The constitutional amendment passed by voters in November 2006 states that Ohio’s minimum wage shall increase on Jan. 1 of each year by the rate of inflation. For employees of smaller companies (grossing $255,000 and less per year in 2008 and $267,000 or less after January 1, 2009) and for 14- and 15-year-olds, the state minimum wage is currently $6.55 per hour and will increase to $7.25 per hour on July 24, 2009. 12.01.2008 Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
The business mileage rate was 50.5 cents in the first half of 2008 and 58.5 cents in the second half. The medical and moving rate was 19 cents in the first half and 27 cents in the second half. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. |
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