NEWSLETTER August 12, 2010
Here it is August already! But not too soon to start planning for taxes!
Hello, this is Jody Tiernan from Tiernan & Associates LLC Tax consultants, your source for income tax preparation and tax related issues. This is the latest issue of our informational newsletter; we hope to bring to you on a quarterly basis, in an effort to communicate issues, and information, that we find are important to our clients.
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This newsletter will also focus on a few of the most common areas that we found to be of concern to our tax clients in the past few tax filing years and the upcoming 2010 tax year.
Homebuyer Credit deadline extended to Sep. 30, 2010!
When he credit was enacted in 2008, the credit was 10 percent of the purchase price of a qualifying residence up to a maximum of $7,500. The credit applied only to homes purchased prior to July 1, 2009. In the original legislation, taxpayers were required to repay the credit over a 15-year period, which ultimately made this credit no more than a tax-free loan.
In early 2009, the Federal government increased the maximum credit to $8,000, extending the cut-off date to November 30, 2009 and eliminated the repayment of the credit.
In November of 2009, the government improved the tax credit once more by expanding the definition of who may qualify as a first-time homebuyer and increasing the time to purchase a home through April 30, 2009.
The government also extended the credit for homes purchased after November 6, 2009 to any taxpayer that meets new "long-term resident" qualifications. These taxpayers may be eligible for a similar credit. Under the credit, you must have lived in your old residence 5 continuous years of the last 8. The ending date is the purchase date of the new residence. The maximum credit allowed is $6,500.
To qualify, you must have purchased the home by April 30, 2010. If you enter into a contract by April 30, and the property closes prior to Oct 1, 2010 you may also be eligible.
Closing Deadline Extended to Sept. 30 for Eligible Homebuyer Credit Purchases
Residential Energy Credit is still here for 2010
In 2007, many taxpayers took advantage of tax credits for various energy saving home improvements. Then in 2008, most of the credits were eliminated.
The energy credits were reinstated for 2009. Not only reinstated, but the amount of credit for qualified improvements has increased from 10 to 30 percent of the cost of the qualifying improvements. The credit is limited to $1,500 per household.
The list for applicable improvements include:
Exterior Windows
Exterior Doors
Electric heat pumps and water heater
Central air conditioners
Insulation material
Certain metal roofing
Please address the credit applicability with the manufacturer, they should be aware of any possible tax credits.
Federal Tax Credits for Consumer Energy Efficiency
Top 10 Things Every Taxpayer Should Know about Identity Theft
IRS Summertime Tax Tips 2010-11
Taxpayers need to be careful to protect their personal information. Identity thieves use many methods to steal personal information and then they use the information to file a tax return and get a refund. Here are 10 things the IRS wants you to know about identity theft so you can avoid becoming the victim of an identity thief.
- The IRS does not initiate contact with a taxpayer by e-mail.
- If you receive a scam e-mail claiming to be from the IRS, forward it to the IRS at phishing@irs.gov
- Identity thieves get your personal information by many different means, including:
- Stealing your wallet or purse
- Posing as someone who needs information about you through a phone call or e-mail
- Looking through your trash for personal information
- Accessing information you provide to an unsecured Internet site.
- If you discover a website that claims to be the IRS but does not begin with ‘www.irs.gov’, forward that link to the IRS at phishing@irs.gov
- To learn how to identify a secure website, visit the Federal Trade Commission at www.onguardonline.gov/tools/recognize-secure-site-using-ssl.aspx
- If your Social Security number is stolen, another individual may use it to get a job. That person’s employer may report income earned by them to the IRS using your Social Security number, thus making it appear that you did not report all of your income on your tax return.
- Your identity may have been stolen if a letter from the IRS indicates more than one tax return was filed for you or the letter states you received wages from an employer you don’t know. If you receive such a letter from the IRS, leading you to believe your identity has been stolen, respond immediately to the name, address or phone number on the IRS notice.
- If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost wallet, questionable credit card activity, or credit report, you need to provide the IRS with proof of your identity. You should submit a copy of your valid government-issued identification – such as a Social Security card, driver’s license, or passport – along with a copy of a police report and/or a completed Form 14039, Identity Theft Affidavit. As an option, you can also contact the IRS Identity Protection Specialized Unit, toll-free at 800-908-4490. You should also follow FTC guidance for reporting identity theft at www.ftc.gov/idtheft
- Show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. Do not routinely carry your card or other documents that display your Social Security number.
- For more information about identity theft – including information about how to report identity theft, phishing and related fraudulent activity – visit the IRS Identity Theft and Your Tax Records Page, which you can find by searching “Identity Theft” on the IRS.gov home page.
Top 10 Things Every Taxpayer Should Know about Identity Theft
We hope this newsletter is a help, and we welcome your comments and suggestions to allow us to improve it.
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