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More on the Worker, Homeownership, and Business Assistance Act of 2009

November 20, 2009 3:14 pm / Leave a comment

Here is an expanded outline on how the Worker, Homeownership, and Business Assistance Act of 2009 may affect some businesses (this outline does not include all the provisions of the act). Click here to read the bill as passed by both the House and the Senate.

  1. Allow for a 5 year carryback of 2009 NOLs
    1.  
        i. Small business will be exempt from the 1 election rule. Thus small business claiming the 5 year carryback for 2008 losses can still elect 5 year carryback for 2009 losses

      2. a. Removes the small business requirement
      b. Offset 50% of taxable income in 5th prior year
      c. Offset 100% of taxable income in 4th thru 1st prior years
      d. Only 1 election allowed (either for fiscal years beginning in 2008 or fiscal years beginning in 2009)

  2. Homebuyer credit
    1.  
        i. If using binding contract rule – must close by July 1, 2010

      2. a. Extended for purchases (binding contracts entered into by) through 4/30/2010b. Recapture waived for 2009 purchases
      c. Credit = lesser of 10% of purchase price or $8,000.
      d. Credit phases out for modified agi between $125k and $145k ($225k and $245k for married joint returns.)
      e. Can elect to treat 2009 purchases as if made in 2008 and claim credit on 2008 return
      f. Need not be a new buyer

        i. Existing homeowners living in current residence for at least 5 consecutive years during 8 year period ending on date of purchase are eligible for credit
        ii. Must live in new home for at least 3 years
        iii. Credit reduced to $6,500

      g. Limitations

        i. Purchase price must be < $800,000 ii. Skip buying a house for the kids – no credit allowed if can be claimed as a dependent of another taxpayer iii. No credit for taxpayers under 18 1. Emancipated minors out of luck unless one is at least 18

      h. MUST attach copy of settlement statement to the return

  3. Penalty for failure to file partnership or s corp returns increased to $195 per partner/shareholder per month beginning with 2010 returns.
  4. Electronic filing mandate
      a. Must use efile if preparing at least 10 individual income tax returns
      b. Individual income tax returns means returns for individuals, estates & trusts
  5. Large Corporation estimated tax payments increased to 100.58% for payments due in July, August or Sept.
      a. Large corporation is a corporation with at least $1b in assets at the end of the preceding tax year.

Is the IRS Looking For You? Might Be a Good Thing.

November 12, 2009 3:30 pm / Leave a comment

Listen to an Audio File for Podcast Watch Video: Undelivered Refunds Watch Video: Track Your Refund

WASHINGTON — The Internal Revenue Service is looking for taxpayers who are due to receive a combined $123.5 million in the form of 107,831 refund checks that were returned to the IRS by the U.S. Postal Service due to mailing address errors.

“We are eager to get this money into the hands of taxpayers, so don’t delay if you think you are missing a refund,” said IRS Commissioner Doug Shulman. “The sooner you update your address information, the quicker you can get your refund.”

All a taxpayer has to do is update his or her address once. The IRS will then send out all checks due. Undeliverable refund checks average $1,148 this year, compared to $990 last year. Some taxpayers are due more than one check.

Average undeliverable refunds rose by 16 percent this year, which is in line with the 16 percent rise in average refunds for all tax returns in the latest filing season. Several changes in tax law likely played a role in boosting refunds, including the First-Time Homebuyer’s Credit and the Recovery Rebate Credit, among others.

The vast majority of checks mailed out by the IRS each year reach their rightful owner. Only a very small percent are returned by the U.S. Postal Service as undeliverable.

If a refund check is returned to the IRS as undeliverable, taxpayers can generally update their addresses with the “Where’s My Refund?” tool on IRS.gov. The tool enables taxpayers to check the status of their refunds. A taxpayer must submit his or her social security number, filing status and amount of refund shown on their 2008 return. The tool will provide the status of their refund and in some cases provide instructions on how to resolve delivery problems.
Taxpayers checking on a refund over the phone will be given instructions on how to update their addresses. Taxpayers can access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.

The IRS encourages taxpayers to choose direct deposit when they file their returns because it puts an end to lost, stolen or undeliverable checks. Taxpayers can receive refunds directly into personal checking or savings accounts. Direct deposit is available for filers of both paper and electronic returns.

The IRS also encourages taxpayers to file their tax returns electronically because e-file eliminates the risk of lost paper returns. E-file also reduces errors on tax returns and speeds up refunds.

E-file coupled with direct deposit is your best option; it’s easy, fast and safe.

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