Making Cent$ Of It All

June 2010 Estimated Tax Reminder

The second estimated tax payment for 2010 is due on 6/15/2010. Both state and federal taxes are due on the same day. Most states and the IRS are no longer sending out paper estimated tax forms.

A fillable Form 1040-ES for your federal taxes is available here: www.irs.gov/pub/irs-pdf/f1040es.pdf

The CT 1040-es can be downloaded from: www.ct.gov/drs/lib/drs/forms/2010forms/ct-1040es.pdf

2009 Home Buyer Tax Credit – expect Delays

2008 gave us the Home Buyer Tax credit for first time home owners. And you know when a new tax credit comes along, fraud can’t be far behind. Reducing fraud and expanding the Home Buyer Tax credit was part of the Worker, Homeownership, and Business Assistance Act of 2009 back in November. And to support new law, the Internal Revenue Service has just released new form (Form 5405) that eligible homebuyers need to use in order to claim the first-time homebuyer credit this tax season.

Here are some highlights taken from IRS news release regarding the new form:

The IRS expects to start processing 2009 tax returns claiming the homebuyer credit in mid-February.
Early taxpayers claiming the homebuyer credit may see tax refunds take an additional two to three weeks.
New documentation requirements mean that taxpayers claiming the credit cannot file electronically and must file paper returns.
In addition to filling out a Form 5405, all eligible homebuyers must include with their 2009 tax returns one of the following documents in order to receive the credit:
- A copy of the settlement statement showing all parties’ names and signatures, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement.
- Mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.
- Newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
- The new law also allows a long-time resident of the same main home to claim the homebuyer credit if they purchase a new principal residence. Certain qualifications apply.

So the bottom line……….

Make sure you have the required documentation to claim the credit and expect your refund to take 8 – 12 weeks ! ! ! ! Once again the innocent pay for those who seek to commit fraud ! ! !

Quickbooks Phishing Email

This was brought to our attention from one of our ever diligent clients. [who shall remain anonymous, but lets call him 'AT']. Mr. ‘AT’ had received an email telling him he needed to install a Digital Certificate by January 20th, otherwise his Quickbooks would cease to work.

It turns out it is a known Phishing Scam. There was another email sent in December with a December 20th due date. Intuit is aware of the issue and is working to shut down the emails but new ones continue to be setup.

Quickbooks updates are NOT sent through the email. So Mr. ‘AT’ did the right thing by not clicking on the link and to give us a call. Phishing emails will not be stopped by antivirus software so it is up to you to review any email that asks for personal information or asks you to install a program or click on a link.

Thanks Mr. ‘AT’ for bringing this to our attention!!!!

Invesco Funds Payments

Recently checks were mailed to former shareholders of Invesco funds.

If you are an eligible investor, you may have received a distribution payment from a Fair Fund established by the U.S. Securities and Exchange Commission (“SEC”).

INVESTMENTS HELD IN A TAXABLE ACCOUNT

If the amount of this payment exceeds your tax basis in your investment, then the excess is includable in your income as capital gain. Any such capital gain is long-term capital gain, unless you disposed of your investment before holding it for longer than one year.

INVESTMENTS HELD IN IRAS OR TAX-QUALIFIED RETIREMENT PLANS

For Checks Payable to the Custodian but Mailed to the Investor

If you held some or all of your mutual fund shares through an IRA, in most cases the distribution check will have been made payable to your IRA custodian but mailed directly to you. You may choose to forward the check to your custodian with a letter of instruction. You should deposit the check in your IRA account. Caution: If the check is cashed or deposited in any account other than an account eligible to receive the check, it may be subject to a 10% penalty and taxed as ordinary income in the year of receipt.

YOU SHOULD NOT RELY ON THIS AS TAX ADVICE.

CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX

CONSEQUENCES OF THE DISTRIBUTION PAYMENT, INCLUDING THE

EFFECTS OF U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. TAX RULES

AND THE EFFECT OF POSSIBLE CHANGES IN LAWS.

Additional information was mailed along with the payment and should be reviewed.

2010 IRS Mileage Rates

Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

50 cents per mile for business miles driven
16.5 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations

The new rates for business, medical and moving purposes are slightly lower than last year’s. The mileage rates for 2010 reflect generally lower transportation costs compared to a year ago.

Revenue Procedure 2009-54 contains additional details regarding the standard mileage rates.

Expanded Home Buyers Tax Credit

Here are the top 10 things the IRS wants you to know about the expanded credit and the qualifications you must meet in order to qualify for it.

You must buy – or enter into a binding contract to buy a principal residence – on or before April 30, 2010.
If you enter into a binding contract by April 30, 2010 you must close on the home on or before June 30, 2010.
For qualifying purchases in 2010, you will have the option of claiming the credit on either your 2009 or 2010 return.
A long-time resident of the same home can now qualify for a reduced credit. You can qualify for the credit if you’ve lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009.
The maximum credit for long-time residents is $6,500. However, married individuals filing separately are limited to $3,250.
People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.
The IRS will issue a December 2009 revision of Form 5405 to claim this credit. The December 2009 form must be used for homes purchased after November 6, 2009 – whether the credit is claimed for 2008 or for 2009 – and for all home purchases that are claimed on 2009 returns.
No credit is available if the purchase price of the home exceeds $800,000.
The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.
A dependent is not eligible to claim the credit.

QB Payroll Updates

If you prepare your own payroll using Quickbooks, make sure your payroll updates are current to support the latest tax law changes.

Facebook Privacy

Are you a Facebook user? Do you know everyone of your friends? And their friends?

I’m always amazed at how much personal info is available on the profile pages.

Here’s a great article on setting your privacy options in Facebook.

http://www.allfacebook.com/2009/02/facebook-privacy/

Too many passwords to remember?

One of the best utilities I use is a password organizer called RoboForm.

With one master password, you can have access to all your protected sites. Passwords can be grouped by use and most recently used are displayed for easy access.

Also included are Safenotes. This is a secure vault for your important notes. Perfect for those log in id’s and passwords that can’t be entered automatically.

Trial version is available which limits you to 10 logins. For more info, check out http://www.roboform.com/.