Archive for January, 2010

Tax Credit Helps Pay for Higher Education Expenses

by P. Lewis Robinson
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Jan
29

The American Recovery and Reinvestment Act was passed in early 2009 and created the American Opportunity Credit. This educational tax credit – which expanded the existing Hope credit – helps parents and students pay for college and college-related expenses.

Here are the top nine things the Internal Revenue Service wants you to know about this valuable credit and how you can benefit from it when you file your 2009 taxes.

  1. The credit can be claimed for tuition and certain fees paid for higher education in 2009 and 2010.
  2. The American Opportunity Credit can be claimed for expenses paid for any of the first four years of post-secondary education. (more…)
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Get Your Refund Faster – Choose Direct Deposit

by P. Lewis Robinson
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Jan
28

If you want to get your refund as quickly as possible, just tell the IRS to deposit your refund directly into your bank account. By choosing Direct Deposit, you can get your refund much sooner than if you chose to have a paper check mailed to you.

Here are the main reasons 73 million taxpayers chose Direct Deposit in 2009:

1.     Security Thousands of paper checks are returned to the IRS by the U.S. Post Office every year as undeliverable mail. Direct Deposit eliminates the possibility you won’t receive your check and prevents your refund from being stolen.

2.     Convenience The money goes directly into your bank account. You won’t have to make a special trip to the bank to deposit the money yourself.

3.     Ease When you’re preparing your return, simply follow the instructions on your return. Make sure you enter the correct bank account and bank routing numbers on your tax form and you’ll receive your refund quicker than ever. (more…)

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Ten Facts About Claiming Donations Made to Haiti

by P. Lewis Robinson
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Jan
26

If you are donating to charities providing earthquake relief in Haiti, you may be able to claim those donations on your 2009 tax return. Here are 10 important facts the Internal Revenue Service wants you to know about this special provision.

  1. A new law allows you to claim donations for Haitian relief on your 2009 tax return, which you will be filing this year.
  2. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.
  3. To be eligible for a deduction on the 2009 tax return, donations must be made after Jan. 11, 2010 and before March 1, 2010. (more…)
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Prepare For Your Tax Preparer

by P. Lewis Robinson
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Jan
25

 Tax Season can be stressful for you and your accountant, but completion of a few small tasks will make your tax return preparation easier for both of you. Of course the simplest way to do this is to fill out your organizer and include copies of all supporting documentation (W-2’s, 1099’s, receipts, etc).  Not everyone is comfortable filling out an organizer, but following these guidelines will save your accountant time, which may also save you money.

  • Be sure the correct birthdays and social security numbers are listed for you, your spouse and any dependents.
  • Notify your accountant of any changes in marital status or number of dependents. (more…)
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Deduction tips for contributors to Haiti relief effort

by P. Lewis Robinson
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Jan
19

http://www.irs.gov

On its website IRS has posted deduction tips for taxpayers planning to make contributions to aid Haitian earthquake victims.

Contributors who itemize deductions are reminded that:

… Contributions to domestic, tax-exempt, charitable organizations providing assistance to individuals in foreign lands are tax-deductible, provided that the U.S. organization has full control and discretion over the uses of donations.
… Contributions to foreign organizations generally are not deductible, nor are contributions to benefit specific individuals or families.
… To substantiate charitable contributions of money, regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution.
… Contributions are deductible in the year made.

RIA observation: A bill has been introduced in Congress to permit Haitian relief donors to elect to treat contributions made after Jan. 11, 2010, and before Mar. 1, 2010, as if the contributions had been made on Dec. 31, 2009. If the election is made, Haiti relief donations would be deductible on the 2009 return, not the 2010 return. This option would be available only if the contribution is made in cash and otherwise meets the requirements for charitable contribution deductions under Code Sec. 170 .

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Top Ten Reasons to Visit IRS.gov

by P. Lewis Robinson
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Jan
14

If you have a tax question or need a tax form – there’s no need to leave the comfort of your home. All you need is a computer and Internet access because IRS.gov has a wealth of information.

Here are the top 10 reasons to visit IRS.gov.

  1. Unlimited access – get answers 24 hours a day seven days a week. If you find yourself working on your tax return over the weekend, there’s no need to wait to get a form or an answer to a question – visit the IRS Web site anytime. IRS.gov is accessible all day, every day. 
  2. Find out all about electronic filing. Virtually everyone can prepare a return and file it for free. You can e-file from the comfort of your home 24 hours a day, seven days a week. E-file is fast and safe. Last year, 2 out of 3 taxpayers used e-file.  Additionally, about 70 percent of taxpayers are eligible for the Traditional Free File.  Find out more about Free File at IRS.gov. 
  3. Check the status of your tax refund. Whether you chose direct deposit or asked IRS to mail you a check, you can check the status of your refund through Where’s my Refund? at IRS.gov.  (more…)
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Ten Tax Topics for Taxpayers with Tots & Teens

by P. Lewis Robinson
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Jan
13

 Got Kids? They may have an impact on your tax situation. Listed below are the top 10 things the IRS wants you to consider if you have children.

  1. Dependents In most cases, a child can be claimed as a dependent in the year they were born. For more information see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information.
  2. Child Tax Credit You may be able to take this credit on your tax return for each of your children under age 17. If you do not benefit from the full amount of the Child Tax Credit, you may be eligible for the Additional Child Tax Credit. The Additional Child Tax Credit is a refundable credit and may give you a refund even if you do not owe any tax. For more information see IRS Publication 972, Child Tax Credit. (more…)
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RMDs for 2010 from Retirement Accounts

by P. Lewis Robinson
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Jan
12

REMINDER: RMDS ARE BACK FOR 2010

This is just a reminder that there are required minimum distributions (RMDs) for 2010 from defined contribution plans (401(k), 403(b), 457 type plans) and from IRAs.
The suspension of RMDs has not been extended – as of the release of this update.
Individuals who turned 70 1/2 in 2009 will calculate their RMDs for 2010 as though there was no suspension last year. They do not have to take the 2009 RMD before April 1, 2010. (more…)

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Property Tax Exemptions if you are 62 and older as of 1/01/2010.

by P. Lewis Robinson
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Jan
10

If you were 62 on January 1, 2010, you may be eligible for certain exemptions from your property taxes in the state of Georgia. You should go by your local Property Tax Office and show them proof of your age as of January 1, 2010 before march 1, 2010 or April 1, 2010, depending on the county where the property is located.

For due dates of personal property tax returns and much more information about the property taxes for each Georgia county, follow the link below to the State of Georgia’s WEB page to select the county that you need information about.
LINK TO GEORGIA DEPARTMENT OF REVENUE

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Estate Tax is Repealed for 2010

by P. Lewis Robinson
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Jan
2

For the first time since 1915, the United States has no Federal estate tax. This situation is scheduled to last only for 2010. In 2011 the estate tax will be restored to the exemption that was in effect in 2001 ($1,000,000.00) with a top rate of 55% rather than the exemption amount for 2009 which was $3,500,000.00 and top rate of 45%.

“If you are at the checkout counter, you might want to expedite things, ” said Representative Richard E. Neal, the Massachusetts Democrat who heads the House subcommittee on taxation. That may be good if the deceased is very wealthy, but most smaller estates will likely incur more taxes because of capital gains on inherited property. This means that the executor of an estate will have to know the tax basis (cost with adjustments for depreciation, dividends reinvested, etc.) of the property owned by the deceased.

“If you are rich, celebrate,” said Senator Harry Reid, Democrat of Nevada and the majority leader. “If you are not, you should be afraid.”

Some tax professionals believe that Congress will extend the estate tax law that was in existence in 2009 sometimes in 2010. Some attorneys believe it is unconstitutional to extend a law that has expired. Some believe a permanent estate tax law will be passed in 2010 that could be effective January 1, 2010.

The bottom line is as of now we don’t have an estate tax law and we have no idea what is going to play out this year.

What should you do?
Review your will with your attorney and CPA and get their opinion as what would happen to your estate in the event of your death in 2010.

-Or-

If you are not very wealthy, pray that you don’t die in 2010.

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