Welcome! This page is for you. It can help you get a Bigger Refund. It is also a place where we can connect. SIGN-UP to receive tax and small business updates by e-mail. FREE SERVICE: Do you have a tax, accounting, financial, or small business question or just want a second opinion? E-mail me at jtpalmiero@windstream.net and I will answer your question free of charge. You can also call me at 814-720-2493. Thank you for visiting.
Monday, January 31, 2011
American Opportunity Tax Credit
Tuesday, January 25, 2011
Monday, January 24, 2011
Mortgage Debt Forgiveness
Saturday, January 22, 2011
From IRS e-News IRS to Start Processing Delayed Returns on Feb. 14; Most People Unaffected and Can File Now
WASHINGTON — The Internal Revenue Service plans a Feb. 14 start date for processing tax returns delayed by last month’s tax law changes. The IRS reminded taxpayers affected by the delay they can begin preparing their tax returns immediately because many software providers are ready now to accept these returns.
Beginning Feb. 14, the IRS will start processing both paper and e-filed returns claiming itemized deductions on Schedule A, the higher education tuition and fees deduction on Form 8917 and the educator expenses deduction. Based on filings last year, about nine million tax returns claimed any of these deductions on returns received by the IRS before Feb. 14.
People using e-file for these delayed forms can get a head start because many major software providers have announced they will accept these impacted returns immediately. The software providers will hold onto the returns and then electronically submit them after the IRS systems open on Feb. 14 for the delayed forms.
Taxpayers using commercial software can check with their providers for specific instructions. Those who use a paid tax preparer should check with their preparer, who also may be holding returns until the updates are complete.
Most other returns, including those claiming the Earned Income Tax Credit (EITC), education tax credits, child tax credit and other popular tax breaks, can be filed as normal, immediately.
The IRS needed the extra time to update its systems to accommodate the tax law changes without disrupting other operations tied to the filing season. The delay followed the Dec. 17 enactment of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which extended a number of expiring provisions including the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.
Tuesday, January 18, 2011
This country needs more Leonard McCrackens!
Monday, January 17, 2011
First-Time Homebuyer Credit
Owning a home has always been part of the American dream. Congress has consistently provided tax deductions and other benefits to homeowners, and 2010 was no exception.
For 2010, the First-Time Homebuyer Credit is available for buyers of homes under the following circumstances:
- You must have a contract in place by April 30, 2010.
- You must complete the purchase or close by September 30, 2010.
- If you are a first-time homebuyer, the credit can reach $8,000 ($4,000 if married filing separately) or if lower, 10% of the purchase price.
- Long-time residents can qualify for a credit up to $6,250 ($3,250 if married filing separately) or if lower, 10% of the purchase price.
- The home must be a principal residence.
- Income limitations and documentation rules apply.
For purchases made in 2010, you can choose to use the credit on your 2009 or 2010 return.
The credit does not apply if the purchase price is greater than $800,000, the home was purchased from a “related person,” another taxpayer can claim the purchaser as a dependent, or the home was acquired through gift or inheritance.
A first-time homebuyer is someone who has not owned a principal residence in the three years before the new home’s purchase date, and a long-time resident has owned and used the same home as the principal residence for any five-consecutive-year period during the eight years before the new home’s purchase date.
The credit, which is refundable, phases out at modified adjusted gross income (AGI) between $225,000 and $245,000 for married taxpayers filing jointly and $125,000 and $145,000 for all other taxpayers.
The credit can be fully claimed if modified AGI is equal to or less than the $225,000 and $125,000 thresholds and is not available when modified AGI is greater than the $245,000 and $145,000 thresholds.
In addition, the credit’s availability is expanded for any individual or spouse who serves on qualified official extended duty for at least 90 days during the period beginning after December 31, 2008 and ending before May 1, 2010. In this case, the deadline to purchase is April 30, 2011 and if by then the buyer enters a binding contract to close by June 30, 2011, he or she has until June 30, 2011 to finalize the purchase.
The credit only needs to be repaid if the home is sold within 36 months of the purchase date.
If you purchased your home in 2008 under the original first-time homebuyer’s rules, you generally must repay the credit over a 15-year period, which begins in 2010. The minimum payment is 1/15 of the original credit received. For homes purchased in 2009, you must repay the credit only if the home is no longer your principal residence within the 36-month period beginning on the purchase date.
The IRS has issued specific guidance on how to claim the credit for all years.
Saturday, January 15, 2011
Tuesday, January 11, 2011
Expiring Provisions
· The State/Local Sales Tax deduction is an election in lieu of deducting state income taxes. It is mostly used by taxpayers residing in Washington, Texas, Nevada, Florida and other states where there is no income tax. Also, it only applies to taxpayers who itemize.
· The Mortgage Insurance Premiums deduction applied to homeowners who made down payments of less than 20% of their homes’ value and were required to carry private mortgage insurance (PMI). These premiums were deductible similar to mortgage interest.
· School Teacher Expenses provision provided a $250 deduction for teachers, counselors, principals and aids for books, supplies and other materials.
· Qualified Charitable Distributions provision was very popular among taxpayers. It allows individuals who are over age 70½ to make a direct charitable gift from their IRA in lieu of taking a required minimum deduction.