Tuesday, April 22, 2014

How Long Do I Have To Keep My Tax Documents ... Really?

Recent question from a client:  I have tax returns back to 1988, I am having items shred, can I shred some of these?

My answer:  Under "normal" circumstances, you can be audited for 3 years from the date you filed a return or the April 15 deadline, whichever is later for a given year.  Just to be safe, I advise keeping all records used to justify income and deductions on a return for one year beyond that, or 4 years.  All records include such things as all the W-2s, 1099s, bank and credit card statements, invoices, receipts, calendars, mileage records, etc.  Scanned copies of all these is a good option, as long as you keep a backup in a separate physical location.  I particularly recommend scanning any receipts or other documents printed on thermal paper, because these rapidly fade to an unreadable, useless state.

"Normal" circumstances implies that

Friday, January 31, 2014

Utah Tax Commission Issues Tax Filing Guidance For Same-Sex Couples For 2013

On January 15, 2014, the Utah State Tax Commission issued a tax notice, "Individual Income Tax Returns For Same-Sex Couples For Tax Year 2013", which includes this statement:

"Same-sex couples who are eligible to file a joint federal income tax return and who elect 
to file jointly, may also file a joint 2013 Utah Individual Income Tax return as provided in Utah 
Code § 59-10-503. Eligible married couples may file a joint return if they are married as of the 
close of the tax year."

As recently as December 6, 2013, Dolores J. Furniss, a Manager with the Commission, noted in her yearly presentation at the Utah State University Income Tax School that same-sex couples who were eligible to and do file joint federal income tax returns for 2013 would have to file as single taxpayers in Utah.  While the January 15 notice is thus an important change for affected taxpayers to consider when filing their 2013 tax returns, this is not a permanent change at this point.  The notice goes on to say:

"This notice is limited to the 2013 tax year. Filing information for future years will be 
provided as court rulings and other information become available. If any taxpayers are required 
to file amended 2013 tax returns based on future court rulings, they will not be subject to 
penalties for any tax deficiencies resulting solely from following this guidance."

Tax laws and regulations change daily, so whether this change impacts you or not, something else will.  Staying informed is more important than ever.

Sunday, January 26, 2014

Are You The Right Person To Work With Me?

Accutek is the professional services company I founded. It is building a team of experienced associates of varied backgrounds that work together with each other and with each individual client to develop unique financial and tax solutions for each client’s personal and business needs.  We are based in Hurricane, Utah, and serve wonderful clients locally and wherever Internet and overnight delivery services can reach.

I think there's a good chance that you, my reader, might just be a great fit for our team.  Please click below to continue reading and learn more about this opportunity!

Monday, January 6, 2014

IRS Will Begin Accepting 2013 Personal Income Tax Returns on January 31

The IRS has announced the following dates they will begin processing 2013 income tax returns:

1040 Series Individual Tax Returns:        January 31, 2014 (please click here for more info)

Entity Tax Returns:                                 January 13, 2014 (please click here for more info)

My suggestion is that you use the time until these dates to organize all your documents and get them to your tax professional so that you are ready to electronically file when the IRS processing date arrives.  You will still get the fastest and best response from the IRS by electronically filing; any paper returns filed will be held until the initial batches of electronically filed returns are processed.

Wednesday, November 20, 2013

$2000 Energy Efficient Home Construction Credit Expiring Dec 31 2013

Builders of a dwelling unit certified to have annual heating and cooling consumption at least 50% below that of a "comparable dwelling unit" and meets related requirements as stated in IRS Notice 2008-35 have been eligible for a $2000 income tax credit since August 2005.  There is also a $1000 income tax credit available if the certified annual heating and cooling consumption is at least 30% below a "comparable dwelling unit".  Builders can claim this credit by completing IRS Form 8908 and attaching it to income your tax return.  (In some cases you can do the simpler IRS Form 3800.  Refer to Form 8908 instructions to determine if this applies to you.)

Homes that are substantially reconstructed and rehabilitated to these energy efficiency standards are also eligible for the credit.

If you are eligible for this credit, you will want to act quickly.  This home energy efficiency credit was scheduled to expire in 2010 and was extended three more years to the current expiration date of December 31, 2013.

The home builder for this purpose is the person who owns and has basis in the qualified energy efficient home during its construction.  If the owner hires a third party contractor to construct the home, and has basis in the home during construction, the person that hires the third party contractor is the one who is eligible to claim this credit.  This provision is carefully worded.  If you need help clarifying it, please be sure to get it!

The rules for certifying the reduced heating and cooling consumption are also spelled out in IRS Notice 2008-35, and include a requirement that it be done by an "eligible certifier", who is not related to the home builder and who had been accredited by the Residential Energy Services Network (RESNET) (or the equivalent rating network)

This credit for construction of new energy efficient homes is number 14 on a list of 55 expiring federal tax provisions.  (For the full list of these, prepared by the Congressional Joint Committee on Taxation staff, click here.)

Photo credit:  http://www.publicdomainpictures.net/hledej.php?hleda=energy+efficient+home&x=-791&y=-45

Tuesday, November 19, 2013

Watch Out: Principal Residence Debt Relief Tax Exclusion Expires 12-31-2013

"Generally, if you owe a debt to someone else and they cancel or forgive that debt for less than its full amount, you are treated for income tax purposes as having income and may have to pay tax on this income." This is how the IRS begins its discussion in Publication 4681 of your potential tax liability when you go through a debt cancellation, foreclosure, repossession, or abandonment.

When the debt is on your principal residence, there has been an important exception to this general rule ... an exception that is scheduled to expire December 31, 2013.  It is number 21 on a list of 55 expiring federal tax provisions.  (For the full list of these, prepared by the Congressional Joint Committee on Taxation staff, click here.)

If you owe substantially more money on your principal residence than it is worth, and you don't have the desire and the ability to continue making the required monthly payments, you may want to seriously consider getting out of the house now before 2013 ends and you possibly add a big tax bill to your pain.

Please give this some thought, and possibly take action after getting appropriate help.

Thursday, November 14, 2013

Payday Loan Addiction ... The Challenges And Possible Solutions

This will be primarily an audio blog post this time.  You never know what is going to come back around for you in life.  I went to elementary and junior high school with some great people, and the friendships continue all these years later.  One of them was Steve Fischmann, who went on to UCLA business school, a management career at Levi Strauss, and four years as a New Mexico State Senator.  He now works on a variety of projects including a weekly radio program out of Las Cruces that discusses local issues that seem to pop up pretty much everywhere.

One of the interests Steve and I share is trying to help people free themselves from the trap of payday, car title, and tax refund anticipation loans, as well as other predatory lending practices.  I'm as excited as anyone to see businesses succeed, in fact I've made a career out of helping people turn their business dreams into reality.  But ... as with any right, one's right to operate a business is limited by one's responsibility to not hurt the rights and opportunities of others.  These loans can be as addictive as any substance, as I have learned from hard experience over my 35 year career, as well as from life in general.

Steve did an hour segment of his radio show on this topic today.  His guest for the full day was