Debra Newby Watkins CPA

On June 29, the House of Representatives by a vote of 409–5 approved H.R. 5623, the Homebuyer Assistance Improvement Act of 2010. This bill would provide first-time homebuyer credit relief to taxpayers who can’t meet a key June 30, 2010, closing date.

H.R. 5623 would amend Code Sec. 36(h)(2) to provide that if a written binding contract to purchase a principal residence was entered into before May 1, 2010, the credit may be claimed if the purchase is closed before Oct. 1, 2010. Thus, this extension would allow homebuyers who signed a contract no later than April 30th deadline to complete their closing by the end of September.

The three-month extension of the closing date is intended to provide tax relief for those who couldn’t close on time because of backlogs at lenders and federal programs involved in homebuyer loans. In the words of the bill’s supporters, the three-month extension “will give time for all the new mortgages to be processed and not punish those homeowners who have been delayed through no fault of their own.”

The Senate will likely vote on the bill by July 1.

The IRS has set up a web page to give additional assistance to unemployed taxpayers.  There are references to publications that may prove helpful to the unemployed.  IRS also points unemployed taxpayers toward the possibility of starting a new business.  Here’s a video that talks about what to do if you’re unable to pay (IRS uses YouTube!)

Here’s a checklist that will help you organize the documents that are necessary for your tax preparer to assist you in the preparation of a complete and accurate return.

• Estimated tax payments

• Wages, salaries, and other employee compensation – Forms W-2

• Pension and annuity income – Forms 1099R

• Social Security benefits received – Forms SSA

• Interest income, statements of tax exempt interest earned, and

• seller-financed mortgages – Forms 1099-INT

• Dividend income and statements of tax exempt dividend earned – Forms 1099-DIV

• Miscellaneous income – Forms 1099 or other forms

• Stock brokerage statements

• Income from business – Attach a schedule of income and expense for each business

• Details of home office expenses

• Capital gains and losses – Forms 1099-B and 1099-S

• Sale/purchase/refinance of personal residence; home equity loans

• Job-related moving expenses

• Rental income – Provide a separate schedule for each property

• Income from partnerships, estates, trusts, or S corporations – Forms K-1

• Contributions to retirement plans including IRA’s and ROTH IRA’s

• Alimony paid/received

• Itemized deductions including:

• Medical and dental expenses

• Taxes (including Sales Tax!)

• Interest – Mortgage, student loan, other

• Contributions, including expenses incurred in performing volunteer work, auto mileage

• Casualty and theft losses

• Investment-related expenses

• Employee business expenses

• Business mileage and travel

• Child care expenses

• Education Expenses

• Please note any changes in dependents or filing status.

ps, a nice bottle of wine is always appropriate.

From WEBCPA:   Internal Revenue Service Commissioner Doug Shulman has decided against coming up with rules on the taxation of employer-provided cell phones and said the IRS would instead wait for congressional legislation.

IRS Fact Sheet FS 2010-4 provides a summary of new and expanded deductions and credits available for the 2009 filing season.  Here are some topics that are covered:

• American Opportunity Credit helps pay for the first four years of college.
• Many energy improvements qualify for expanded tax credits.
• New vehicle purchase incentives.
• Tax credits for low and moderate income workers.
• Standard deduction increases for most taxpayers.

Read the full text at the link provided above.

IRS Rev. Proc. 2009-52 provides guidance under Section 13 of the Worker, Homeownership, And Business Assistance Act 2009.  Section 13 allows taxpayers to elect to carry back an applicable NOL for a period o 3, 4, or 5 years, to offset taxable income in those preceding taxable years.  It applies to NOLs for a taxable year ending after December 31, 2007, and beginning before January 1, 2010.  An election must be attached to the appropriate carryback form.  Here is sample language from the IRS website:

ABC Company is electing to apply Section 172(b)(1)(H) under Rev. Proc. 2009-52.  ABC Company is not a TARP recipient and was not an affiliate of a TARP recipient during 2008 or 2009.  We are electing a 4 year carryback period.

On December 7, House Ways and Means Committee Chair Charlie Rangel (D-NY) formally introduced H.R. 4213, the “Tax Extenders Act of 2009.” The 110-page measure, which would extend for one year 40-plus provisions that are set to expire at the end of this year, would be paid for by new foreign account tax compliance measures, and taxing “carried interest” as ordinary income. The bill is slated to be considered by the House Rules Committee on December 8, and then proceed directly to the House floor.

Individual provisions that would get a one-year lease on life are the election to claim an itemized deduction for state and local general sales taxes, the additional standard deduction for real property taxes, and the above-the-line deductions for qualified tuition costs and for schoolteachers.

On December 2, Democratic members of the House Ways & Means Committee predicted that the House would take up an estate tax relief bill this week. H.R. 4154, the “Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009, ” is slated to be considered by the House of Representatives on December 3. Ways & Means Select Revenue Subcommittee Chair Richard Neal (D-MA) said he expected that the House would actually pass the bill on December 3. An extenders bill may be taken up as early as next week.

(Checkpoint’s Newsstand)