Individual Tax Accountant (CPA) Thoughts Archives - Page 11 of 12

Beginning in 2011, rental property owners are required to issue 1099-MISC forms to any person that provides over $600 worth of services to their rental property in a given year. It remains to be seen how much of an administrative headache this will be for the property owner, tax preparers, and accountants. However, I can tell you that it will be less of a burden if your require your vendors to provide you with a completed W-9 form prior to performing their work. It is much easier to get this information ahead of time rather than after the fact.

Although the IRS began receiving electronically filed returns starting on Friday, January 14, 2011 many returns with specific forms have been delayed because of the last minute tax law changes passed in December of 2010. We received notice from the IRS yesterday that they will begin accepting returns that include schedule A, tuition and fee deductions, and educator expenses on 2/14/11. The IRS has continued to publicize that returns electronically filed on that date will receive priority and be processed more quickly than any paper returns sent in prior to that date.

The residential energy tax credits were set to expire on 12/31/10 for projects such as installing additional insulation, qualified roofs, doors, windows, HVACs, etc. Congress let the previous rules go away but did add a $500 credit for 2011. However, there are a bunch of caveats. The percentage of the credit has been reduced from 30% of expenditures to 10%. In addition, there are limitations (below the $500 amount) depending upon the type of project that you are implementing. Finally, if you have claimed over $500 in energy tax credits since 2005 you are not eligible to claim this extended credit in 2011 As always, the bottom line is to look at all the details and be sure that you will qualify before you start on that big product. With some quick questions your friendly neighborhood tax accountant can help you determine if you will qualify for the 2011 $500 Energy Tax Credit.

Mon AM Tax Tip: Back to the tip on making a deductible 2010 IRA contribution through 4/15/11. You can even do so with your refund from your 2010 tax return if you file early enough. Potentially allowing you to take the credit without going out of pocket! Little nuances like these are the way a tax accountant can help you save money and headaches!

Back to the tip on making a deductible 2010 IRA contribution through 4/15/11. You can even do so with your refund from your 2010 tax return if you file early enough. Potentially allowing you to take the credit without going out of pocket! This is another way that working with a professional tax accountant can save you time and money!

Good news- the state of North Carolina is attempting to publicize the information that they intend to promptly pay tax refund this year. By promptly, they mean 30-45 days within filing your tax return. This is different than the past few years, when if you didn't file early the state ran out of refund money and might keep you waiting months to receive your refund. If they paid that late they did often have to pay you interest. They have decided that borrowing to pay the refunds on time will be cheaper than the interest they were paying the tax payers.

On the flip side of this, state tax returns can not be electronically filed until the federal tax return has been electronically accepted. Unfortunately, with the last minute federal tax changes unless you have the simplest tax return (no itemized deduction,s etc) you won't be able to electronically file your federal return until mid to late February. Life as an accountant is never as boring as people make it out to be!

Reminder- Time is running out on the residential energy tax credits. They expire on 12/31/10. This video contains some more details:

Monday AM Tax Tip: Confused about how the new tax laws apply to you? It can get complicated. Ask your local tax and accounting professional how the changes apply to your specific situation.

I received a call this AM from the good folks @ Carolina Green Building LLC. It seems that they are seeing a lot of people make last minute efforts to implement energy efficient projects at the end of 2010? Why the push? Because these tax credits expire at the end of 2010. What tax credits, you ask? These are credits for improvements made to your main residential home such as more efficient doors, windows, insulation, HVAC, etc. Qualified equipment (see your installer for whether items are qualified) are eligible for a 30% credit up to $1,500 total for the combined 2009 and 2010 tax years. Don't make a mistake and assume you will receive the credit for 2010 if you maxed it out in 2009.