Wednesday, March 11, 2009
Waiting on your Federal Refund
Waiting on your Federal refund, call the IRS at (800) 829-1954 its free and you can get the status of your funds.
Thursday, March 5, 2009
NYS Tax Extension - Online & Free
Need an extension to file your personal income tax return? Apply online for an automatic extension. It's free and easy to use. You'll receive an instant, printable confirmation that the Tax Department received your application.
To apply for an extension to file online, go to:
https://www8.nystax.gov/PEXT/pextHome
If you owe tax with your extension, you can pay it by:
- direct debit from a savings or checking account
- credit card (a convenience fee applies)
- printing a voucher and mailing a check
To apply for an extension to file online, go to:
https://www8.nystax.gov/PEXT/pextHome
If you owe tax with your extension, you can pay it by:
- direct debit from a savings or checking account
- credit card (a convenience fee applies)
- printing a voucher and mailing a check
Special Tax Exclusion For Mortgage Debt Forgiveness
Mortgage Debt Forgiveness as per the IRS Tax Tips #44
If your mortgage debt is partly or entirely forgiven during tax years 2007 – 2012, you may be able to claim special tax relief and exclude the debt forgiveness income.
Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence. The limit is $1 million for a married person filing a separate return.
Taxpayers may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
However, proceeds of refinanced debt used for other purposes (for example, to pay off credit card debt) do not qualify for the exclusion.
If you qualify, you claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attaching it to your federal income tax return for the year.
Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other tax relief provisions, (for example, insolvency), may be available.
If your debt is reduced or eliminated you will receive a year-end statement, Form 1099-C, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed. The IRS urges borrowers to examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for your home (Box 7).
For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit the IRS Web site at IRS.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. People may obtain a copy of this publication and Form 982 either by downloading from IRS.gov or by calling 800-TAX-FORM (800-829-3676).
If your mortgage debt is partly or entirely forgiven during tax years 2007 – 2012, you may be able to claim special tax relief and exclude the debt forgiveness income.
Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence. The limit is $1 million for a married person filing a separate return.
Taxpayers may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
However, proceeds of refinanced debt used for other purposes (for example, to pay off credit card debt) do not qualify for the exclusion.
If you qualify, you claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attaching it to your federal income tax return for the year.
Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other tax relief provisions, (for example, insolvency), may be available.
If your debt is reduced or eliminated you will receive a year-end statement, Form 1099-C, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed. The IRS urges borrowers to examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for your home (Box 7).
For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit the IRS Web site at IRS.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. People may obtain a copy of this publication and Form 982 either by downloading from IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Saturday, February 28, 2009
Getting the Recovery Rebate Right
How to Get the Recovery Rebate Credit Right
The IRS sent taxpayers nearly 119 million stimulus payments last year. There are three ways individuals can find out how much they received:
1. Check the amount listed on Notice 1378, which the IRS mailed last year to individuals who received the economic stimulus payment.
2. Go to the How Much Was My Stimulus Payment? tool that is available on the IRS Web site, IRS.gov. This can provide the correct amount in a matter of a few seconds.
3. Individuals can call the IRS at 1-866-234-2942. After a brief recorded announcement they can select option one to find out the amount of their economic stimulus payment. They will need to provide their filing status, Social Security Number and number of exemptions.
With the amount of last year’s economic stimulus payment in hand, the taxpayer can then enter the figure on the recovery rebate credit worksheet or in the appropriate location when your Tax preparaer requests it.
If the taxpayer or preparer is using tax software, the amount of the recovery rebate credit will automatically be calculated and reported properly. If the taxpayer is using the paper method, the recovery rebate credit, as determined through the worksheet, should be reported on Line 70 of Form 1040, Line 42 of Form 1040A or Line 9 of Form 1040EZ.
If there is any question at all as to the amount that should be reported for the recovery rebate credit, the taxpayer or preparer should enter "RRC" next to the appropriate line above, and the IRS will determine whether a recovery rebate credit is due, and, if so, how much.
Some of the major factors that could qualify you for the recovery rebate credit include:
Your financial situation changed dramatically from 2007 to 2008.
You did not file a 2007 tax return.
Your family gained an additional qualifying child in 2008.
You were claimed as a dependent on someone else’s return in 2007 but cannot be claimed as dependent by someone else in 2008.
The IRS sent taxpayers nearly 119 million stimulus payments last year. There are three ways individuals can find out how much they received:
1. Check the amount listed on Notice 1378, which the IRS mailed last year to individuals who received the economic stimulus payment.
2. Go to the How Much Was My Stimulus Payment? tool that is available on the IRS Web site, IRS.gov. This can provide the correct amount in a matter of a few seconds.
3. Individuals can call the IRS at 1-866-234-2942. After a brief recorded announcement they can select option one to find out the amount of their economic stimulus payment. They will need to provide their filing status, Social Security Number and number of exemptions.
With the amount of last year’s economic stimulus payment in hand, the taxpayer can then enter the figure on the recovery rebate credit worksheet or in the appropriate location when your Tax preparaer requests it.
If the taxpayer or preparer is using tax software, the amount of the recovery rebate credit will automatically be calculated and reported properly. If the taxpayer is using the paper method, the recovery rebate credit, as determined through the worksheet, should be reported on Line 70 of Form 1040, Line 42 of Form 1040A or Line 9 of Form 1040EZ.
If there is any question at all as to the amount that should be reported for the recovery rebate credit, the taxpayer or preparer should enter "RRC" next to the appropriate line above, and the IRS will determine whether a recovery rebate credit is due, and, if so, how much.
Some of the major factors that could qualify you for the recovery rebate credit include:
Your financial situation changed dramatically from 2007 to 2008.
You did not file a 2007 tax return.
Your family gained an additional qualifying child in 2008.
You were claimed as a dependent on someone else’s return in 2007 but cannot be claimed as dependent by someone else in 2008.
Wednesday, February 11, 2009
New S-Corporation Franchise Tax Minimum Tax Payments
This is new for Tax Year 2008.
New York S corporations taxable under Article 9-A are required to pay
the fixed dollar minimum tax.
Fixed dollar minimum tax for all New York S corporations.
Not more than $100,000 $ 25 *
More than $100,000 but not over $250,000 $ 50 *
More than $250,000 but not over $500,000 $ 175 *
More than $500,000 but not over $1,000,000 $ 300
More than $1,000,000 but not over $5,000,000 $ 1,000
More than $5,000,000 but not over $25,000,000 $ 3,000
Over $25,000,000 $ 4,500
New York S corporations taxable under Article 9-A are required to pay
the fixed dollar minimum tax.
Fixed dollar minimum tax for all New York S corporations.
Not more than $100,000 $ 25 *
More than $100,000 but not over $250,000 $ 50 *
More than $250,000 but not over $500,000 $ 175 *
More than $500,000 but not over $1,000,000 $ 300
More than $1,000,000 but not over $5,000,000 $ 1,000
More than $5,000,000 but not over $25,000,000 $ 3,000
Over $25,000,000 $ 4,500
Schedule A- Either State & Local Income Tax or Sales Tax but not both
Another Tax tip from your Staten Island CPA
If you file a Form 1040, and itemize deductions on Schedule A, you have the option of claiming either state and local income taxes or state and local sales taxes. (You can’t claim both.) If you saved your receipts throughout the year, you can add up the total amount of sales taxes you actually paid and claim that amount. This is especially helpful if you live in a state with no income tax or you live in a state with income tax, like New York, but purchased a large item (like a car, truck, boat, or appliances). Many smaller taxpayers forget this rule and forget to take the higher amount on their schedule A.
If you file a Form 1040, and itemize deductions on Schedule A, you have the option of claiming either state and local income taxes or state and local sales taxes. (You can’t claim both.) If you saved your receipts throughout the year, you can add up the total amount of sales taxes you actually paid and claim that amount. This is especially helpful if you live in a state with no income tax or you live in a state with income tax, like New York, but purchased a large item (like a car, truck, boat, or appliances). Many smaller taxpayers forget this rule and forget to take the higher amount on their schedule A.
Tuesday, February 3, 2009
Retirement Contribution Due Dates
Here are some quick Retirement Contribution tips for 2009. These are federal tips and are not New York State specific.
1. Fund your retirement accounts. The deadline for this would be April 15th, 2009 for a 2008 tax year contribution to your retirement account (Traditional IRA or Roth IRA). However, if you have a Keogh or SEP and you get a personal filing extension to October 15, 2009, you can wait until then to put 2008 money into those retirement accounts.
1. Fund your retirement accounts. The deadline for this would be April 15th, 2009 for a 2008 tax year contribution to your retirement account (Traditional IRA or Roth IRA). However, if you have a Keogh or SEP and you get a personal filing extension to October 15, 2009, you can wait until then to put 2008 money into those retirement accounts.
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