Tax Filing Help

It's Tax Season



Your W-2s, 1099s, bank & broker statements and K-1s should have started to arrive and we're now in Tax Season. Below are some useful highlights to recent changes. Contact your CPA today to help get organized. Some offer substantial Early Bird discounts (including MyNetCPA.com).

You may have sold some mutual funds or stocks, married, divorced, had (or adopted) a child, moved, attended classes, made improvements to your house, changed jobs and/or bought a home or car. Like much of life's changes, these activities affect the amount of taxes you pay. Here are a couple of thoughts about recent changes which complicate filing your taxes and planning for 2010.

Bought a home:


To take advantage of the home buyers' credits ($8,000 for 1st time buyers, $6,500 for others (if purchased after 11/6/09), subject to certain earnings limits), you'll need to -

a) File a paper return (cannot e-file)

b) Include Form 5405 with your Form 1040, and

c) Include the final settlement statement (usually a Form HUD-1). Existing homeowners claiming the credit must also provide documentation proving ownership with mortgage statements, property tax receipts or homeowner's insurance records.

Bought a car:


The Cash for Clunkers program doesn't affect your income tax filing. You should have received the credit off your purchase price from the dealership. If you did not, or have more questions about this program, check www.cars.gov (note especially the .gov). However, you may be able to deduct sales tax paid for buying a car in 2009.

Had a job:


The Making Work Pay Credit program gave a credit to most employees through lower federal income tax withholding on each paycheck in 2009. However, you must file Schedule M to claim the credit and there are numerous complications. If you had more than one job and/or received Social Security benefits in addition to having a job, your 2009 withholding may have been inappropriate for your circumstances and you may receive a lower refund (or owe more) when you file your 2009 tax return. This program continues in 2010 and will result in a slightly lower amount of take home pay in 2010 vs. 2009 because of changes in the required payroll withholding amounts.

Important: This is a refundable credit (similar to the Earned Income Credit). Even if you owe no taxes, you may still claim the credit by filing a Schedule M.

Claim the Standard Deduction:

If your potentially itemized deductions (medical, taxes, interest, casualty losses and certain other costs) are near or less than your standard deduction (increased in 2009), you may still benefit from some of these itemized deductions while still claiming the standard deduction. Real estate tax, sales or excise tax paid for a new car or certain disaster losses (reported on Form 4684) can still be claimed using Schedule L.

I am happy to assist you with these and any other tax and financial planning situations.

Contact me today:
kfolberg@mynetcpa.com
(262) 421-1170 Office
(877) 277-7151 Fax