Archive for 'Taxes'

Feb 09

That credit existed in 2008 and applied to home purchases between April 9 and December 31, 2008.

The $7,500 credit has to be repaid over 15 years. You are to add $500 to your 2009 return using Form 5405. If you sell the house before the credit is fully repaid, you are to pay the lesser of your profit or the remaining unpaid credit.

The IRS has said it cannot waive the repayment, even though later versions of the credit do not require repayment unless the house is sold within three years.

Feb 09

On October 26, 2009, IRS Commissioner Douglas Shulman announced the creation of a new group to target high-wealth individuals. This group (the Global High Wealth Industry Group) will be housed within the Large and Mid-Size Business (LMSB) Division.

The idea is to centralize IRS compliance efforts.  The IRS will take a unified approach to look at sophisticated financial, business, and investment arrangements across multiple entities with complicated legal structures and tax consequences.

Shulman seemed to indicate that current IRS efforts typically involve identifying single returns for audit based on the usual scoring systems for audit selection. The new program would instead look at everything that may be connected to a single taxpayer, including trusts, private foundations, partnerships, equity-sharing arrangements, royalty and licensing agreements, and privately held and related entities where the taxpayer may have actual or beneficial ownership.

Shulman said the IRS will initially focus on individuals with “tens of millions of dollars” in assets or income.

Feb 08

The required minimums resume this year because Congress did not extend the waiver into 2010.

If you were 70 1/2 going into 2009, your required distributions are resuming.

If you turned 70 1/2 last year, you do not have take a distribution for 2009 by April 1,2010. You do however have to take a 2010 distribution by December 31, 2010. 

Distributions are calculated on the previous year-end balance. The 2010 distributions would therefore be calculated on your 12/31/2009 balance.

Feb 08

Remember that donations to Haiti relief made in January and February, 2010 can deducted on your 2009 tax return. Donations must be made, however, to U.S. charities.

Feb 08

The IRS has announced that it will start intensive employment tax audits under its National Research Program (NRP) with random audits to begin in February 2010. The IRS said it will audit approximately 6,000 U.S. companies

The NRP project will help the IRS update its noncompliance estimates and its audit selection programs. The IRS does not believe that its traditional audits yield compliance data as accurate as the NRP. NRP audits are random and allow the IRS to statistically measure noncompliance in a specific area.

The goal of this program is to gather information in five categories: worker classification, fringe benefits, nonfilers, reimbursed expenses, and officer compensation.

Feb 04

Quotes are solicited under Request For Quotation (RFQ) number TIRWR-10-Q-00023. This announcement constitutes the only solicitation; a written RFQ will not be issued. If your company can provide the product listed in the RFQ and comply with all of the RFQ instructions, please respond to this notice.

The Internal Revenue Service (IRS) intends to purchase sixty Remington Model 870 Police RAMAC #24587 12 gauge pump-action shotguns for the Criminal Investigation Division. The Remington parkerized shotguns, with fourteen inch barrel, modified choke, Wilson Combat Ghost Ring rear sight and XS4 Contour Bead front sight, Knoxx Reduced Recoil Adjustable Stock, and Speedfeed ribbed black forend, are designated as the only shotguns authorized for IRS duty based on compatibility with IRS existing shotgun inventory, certified armorer and combat training and protocol, maintenance, and parts.

Submit quotes including 11% Firearms and Ammunition Excise Tax (FAET) and shipping to Washington DC.

Feb 03

On February 3, 1913 the 16th amendment was ratified, giving Congress the power to lay and collect taxes on all incomes.

Feb 02

My favorite is “reform the U.S. international tax system.”

US multinationals operate on a worldwide tax regime. This is quite unusual; most countries do not tax their multinationals in this manner. In most countries, the corporation pays tax on income generated within the borders of that country. The US disregards borders – for the most part. 

Granted the US scheme is somewhat offset by the foreign tax credit, but in turn that is offset by the CFC scheme, on and on…

                 WSJ Chart

Feb 01

In his State of the Union speech, Obama outlined four proposals aimed at small businesses: eliminating the capital gains tax, encouraging lending, and developing tax credits for new hires and for investments in equipment and facilities.

On Friday, January 29, 2010, the President introduced plans to give employers a $5,000 tax credit for each net new worker hired this year. The purpose is to jumpstart hiring. The credit would be based on an unemployment wage base and would require approximately $7,000 of wages to obtain the full $5,000 credit.

Start-up companies would get a $2,500 tax credit for each worker hired.

In addition there would be another credit – a second credit – refunding a portion of the employer’s social security match. The idea is to refund the match paid on wage increases in excess of the rate of inflation. This credit will be based on the social security wage base, so it will automatically cutoff at $106,800 (which is the maximum subject to social security in 2010).

There are anti-abuse provisions. You cannot fire employees and hire them right back, for example. You cannot go “out of business” and pop up the following day or week.

The White House wants the credits to be retroactive to January 1. They would exist only for 2010.

Employers would be able to claim the credit on a quarterly basis, both as an incentive to hire and to get cash into the economy.

By the way, not-for-profits would qualify for the credit.

There is a credit maximum of $500,000 per business. There is a second limit – the credit would cap at 25% of the increase in a business’ social security wage base.

The cost? About $33 billion.

Feb 01

You may be entitled to a tax credit for 2009. This is an offbeat credit, so you may not have heard of it. The following is from the IRS:

Certain government retirees who receive a government pension or annuity payment in 2009 may be eligible for the Government Retiree Credit. The American Recovery and Reinvestment Act of 2009 provides this one-time credit of $250 for certain federal and state pensioners.

Here are seven things the IRS wants you to know about the Government Retiree Credit :

1. You can take this credit if you receive a pension or annuity payment in 2009 for service performed for the U.S. Government or any U.S. state or local government and the service was not covered by social security.

2. Recipients of the Making Work Pay Credit will have that credit reduced by any Government Retiree Credit they receive.

3. The credit is $250 for individuals and $500 if married filing jointly and both you and your spouse receive a qualifying pension or annuity.

4. You must have a valid social security number to claim the credit. If married filing jointly, both spouses must have a valid social security number to each claim the $250 credit.

5. You cannot take the credit if you received a $250 economic recovery payment in 2009.

6. This is a refundable credit, which means it may give you a refund even if you had no tax withheld from your pension.

7. To claim the credit, you must complete Schedule M, Making Work Pay and Government Retiree Credits, and attach it to your Form 1040A or 1040.