If you forgot to include some income or to take a deduction on your tax return – you can correct it by amending your tax return.
In some cases, you do not need to amend your tax return. The Internal Revenue Service usually corrects math errors or requests missing forms – such as W-2s or schedules – when processing an original return. In these instances, do not amend your return. (more…)
As you get ready to prepare your 2009 tax return, the Internal Revenue Service wants to make sure you have all the details about tax law changes that may impact your tax return.
Here are the top five changes that may show up on your 2009 return.
1. The American Recovery and Reinvestment Act
ARRA provides several tax provisions that affect tax year 2009 individual tax returns due April 15, 2010. The recovery law provides tax incentives for first-time homebuyers, people who purchased new cars, those that made their homes more energy efficient, parents and students paying for college, and people who received unemployment compensation.
2. IRA Deduction Expanded (more…)
The 2009 required minimum distributions (RMDs) from plans and IRAs was suspended by the passage of the Worker, Retiree and Employer Recovery Act of 2008 (WRERA).
Even though the RMDs were suspended for 2009, some people received them anyway. In general, when a taxpayer receives a distribution from a qualified retirement account or an IRA, that distribution is eligible for rollover to another retirement account within 60 days of the receipt of the funds.
Can they be undone?
Click for link to Federal Applicable Rates for November, 2009
Under Code Sec. 168(e)(3)(E), qualified leasehold improvements, qualified restaurant improvements, and qualified retail improvement property placed in service before January 1, 2010 may be written off over 15 years via straight line. Unless Congress acts, the generally applicable writeoff period for these improvements will revert to 39 years for property placed in service after 2009.
There are other breaks scheduled to expire in 2009 and still others will expire in 2010. If you would like more information, please contact us.
The built-in gains tax applies the highest corporate tax rate (currently 35%) when a C Corporation elects to become an S Corporation, which absorbs “built-in gains” into its income. Built-in gains are items for which a former C Corporation had accrued an economic benefit when it became effective as an S Corporation. Typically, property and any other appreciated items contribute to built-in gains. For example, if a corporation owned a piece of land worth $200,000 when it became an S Corporation, and the land had a basis of $120,000, the built-in gain would be $80,000.
Generally the built-in gains period extends to the corporation’s first 10 years as an S Corporation. Therefore, companies often avoid selling any items subject to the built-in gains tax until the ten year period has expired. However, the 2009 Economic Recovery Act has reduced the period to seven years for the 2009 and 2010 tax years. Essentially, companies that became S Corporations in 2002 and 2003 will no longer be subject to the built-in gains tax in 2009 and 2010, respectively.
To the extent that tax isn’t collected through withholding, taxpayers generally are required to make quarterly estimated payments of tax, in an amount determined by the required annual payment. The required annual payment is the lesser of 90% of the tax shown on the return or 100% of the tax shown on the return for the prior tax year. However, under Code Sec. 6654(d)(1)(C) , the prior-year percentage is 110% if adjusted gross income (AGI) for the preceding year exceeded $150,000). An underpayment results if the required payment exceeds the amount (if any) of the installment paid on or before the due date of the installment.
|
Filing Status |
Standard Deduction |
Additional Amount if Blind |
Additional Amount if age 65+ |
|
Single |
$5,700 |
$1,400 |
$1,400 |
|
Head of Household |
$8,350 |
$1,400 |
$1,400 |
|
Married Filing Jointly |
$11,400 |
$1,100 |
$1,100 |
|
Married Filing Separately |
$5,700 |
$1,100 |
$1,100 |
|
Qualifying Widow/Widower |
$11,400 |
$1,100 |
$1,100 |
|
Dependent* |
$950 – $5700 |
N/A |
N/A |
