IRS Announces 2010 Standard Mileage Rates

The Internal Revenue Service issued the following 2010 standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes:

• 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
  

Homebuyer Tax Credit extended; bill includes e-filing mandate

President Obama signed the extension of the First-Time Homebuyer Tax Credit to cover purchases of a principal residences to May 1, 2010. The credit was also expanded to existing homeowners. A $6,500 tax credit is available for purchases of a new principal residences by homeowners who have lived in their current principal residence five consecutive years out of the last eight years.

The bill also includes an efiling requirement by all tax preparers who prepare ten or more individual tax returns in a calendar year. This requirement is effective for returns prepared after December 31, 2010.

Microsoft Discontinues Accounting Software

Microsoft Discontinues Accounting Software

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Form an LLC for Free (aside from state fees)

Through a Profit 501 tweet, I found a great site to help small business owners form an LLC (Limited Liability Company) for FREE - FormLLCDirect . From the FormLLC Direct website, FormLLCDirect is a 100% FREE service that was created by top corporate and tax attorneys who worked at some of the largest law firms in the country. The website helps you create your LLC Articles of Organization and obtain the LLC's Tax ID number. There is a fee for the LLC operating agreement but FormLLCDirect has negotiated a special discount for all FormLLCDirect users with MyLLCAgreement.com.

IRS simplifies transcript requests for mortgage applicants

AccountingWEB posted an informative article regarding transcript requests for mortgage applicants - http://www.accountingweb.com/topic/tax/irs-simplifies-transcript-requests-mortgage-applicants

Why Not Have The IRS Calculate Taxes for You?

The White House's agenda is getting a little scary:

• Government-run health plan (an organization that also manages social security, medicare, medicaid, and the US Postal Service),
• Trying to control the press (isolating Fox News),
• Is having the IRS send taxpayers a tax form with amounts already filled in next on the agenda?

Per the NSAlert - October 23, 2009

Why Not Have IRS Calculate Taxes for You?

One of the Speakers at the CERCA conference on October 14 also addressed the idea of “simplicity,” which in this instance took the form of the IRS sending taxpayers a tax form with amounts already filled in. Ian Liddell Grainger, a member of the United Kingdom's Parliament, and chairman of the U.K. All Party Parliamentary Group on Taxation, vehemently opposed this idea, which is similar to the U.K. system in which the government calculates employees' taxes and employers withhold those amounts from employees' paychecks. He said the IRS system, in which individuals figure out their own taxes and submit them to the government voluntarily is far superior.

One of its many problems, Grainger said, is that taxpayers are unaware of the codes that revenue officials use to designate their tax liability and are afraid to challenge the government when they think their taxes are wrong. The assumption is that prepopulating tax returns reduces the compliance burden for individual taxpayers. “That's not really the case,” he said. “What it actually does is encourage the taxpayer to be absent from compliance activities—in other words, you are taking the taxpayer out of the loop.”

NSAlert readers may remember that Austan Goolsbee, the president's economic adviser, said in July that a tax reform commission is seriously considering this prepopulated return idea, but that the president was not close to proposing it yet. Grainger said he is hoping to meet with government officials to dissuade them from the idea.

Small Business Resources Worth Checking Out

I ran across an interesting website this morning that might be worth checking out: Start, Run & Grow Your Business .

Also, for small business bookkeeping, you might want to check out Outright.com . It is a FREE online bookkeeping product. I am going to take a closer look at it when I get past this 10/15/09 extension deadline. From what I have seen so far, it looks like a great bookkeeping solution for small business, and it's FREE.

Quickbooks: Fraudulent Emails

Intuit Security is investigating fraudulent emails that were sent to some customers that claimed to be from The Intuit Online Team. This was not sent by Intuit and is a Phishing Scam. More information is available at http://security.intuit.com/alerts/alert.php?a=5 .

Five Facts about the Home Office Deduction

With technology making it easier than ever for people to operate a business out of their house, many taxpayers, enterpreneurs and small business people may be able to take a home office deduction when filing their 2009 federal tax return next year.

Here are five important things the IRS wants you to know about claiming the home office deduction.

1. Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly:

• As your principal place of business, or

• As a place to meet or deal with patients, clients or customers in the normal course of your business, or

• In the case of a separate structure which is not attached to your home, it must be used in connection with your trade or business

For certain storage use, rental use or daycare-facility use, you are required to use the property regularly but not exclusively.

2. Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.

3. There are special rules for qualified daycare providers and for persons storing business inventory or product samples.

4. If you are self-employed, use Form 8829, Expenses for Business Use of Your Home, to figure your home office deduction. Report the deduction on line 30 of Schedule C, Form 1040.

5. Different rules apply to claiming the home office deduction if you are an employee. For example, the regular and exclusive business use must be for the convenience of your employer.

For more information see IRS Publication 587, Business Use of Your Home, available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Great Note Saving/Organizing App

I've found a great answer to saving/organizing ALL (and I mean ALL) of my notes, research, web pages, business cards, sticky notes, etc. I've been use Evernote (http://www.evernote.com) for a couple of weeks now and am finding it extremely useful. Here is an explanation from their website - "Evernote allows you to easily capture information in any environment using whatever device or platform you find most convenient, and makes this information accessible and searchable at any time, from anywhere. Did we mention that it's free?...Capture what you like, find it when you want. Stop forgetting things. Capture everything now so you will be able to find it all later."

Personally, I've saved recipes, tax research articles, audio research articles, business cards, and my ongoing task list. If I need to something I've saved, I just do a search. For example, I recently came across a good teriyaki sauce recipe on a website so I "clipped" it to my Evernote account. A few days later, I needed the recipe again. I went to my Evernote account, searched teriyaki, and there was the recipe.

Tax Tip - Renewed Tax Breaks for 2008 and 2009

The following tax breaks were renewed for the 2008 and 2009 tax years:

• Deduction for state and local sales taxes on Form 1040 Schedule A
• Educator expense deduction
• Tuition and Fees deduction
• Residential Energy-Efficient Property Credit was extended through 2016. This includes solar electric, solar water heating, fuel cell property, small wind energy, and geothermal heat pump property.

Per IRS TT-2009-24

1099 Tax Forms May Arrive Later For Many Investors

Per an IRS News Release

IR-2009-11, Jan. 30, 2009

Many investors will receive their year-end tax statements later than in past years, but these forms are likely to be more accurate, according to the Internal Revenue Service.

A new law, enacted last fall, changed the deadline from Jan. 31 to Feb. 15, when brokers, including brokerage firms, mutual fund companies and barter exchanges, must furnish year-end Form 1099-B to their customers, Where a broker furnishes these forms by mail, this means that the forms must be mailed, not received by that date.

Delayed Tax Refunds

Our tax software, ATX, reports that refunds may be delayed for those claiming the recovery rebate credit.

The IRS has announced that if the amount claimed does not match the amount that the IRS has on file, the return will go to the IRS error resolution system. The refund may be delayed by one deposit cycle (one week). For example, a deposit that the taxpayer is expecting on Friday, January 30, may not be made until Friday, February 6. 

Tax Tip - Donation Valuation Guide

A frequent request from clients is how to value items they've donated throughout the year.  The Salvation Army provides a good link - click here to go to the Salvation Army's Valuation Guide .

Note: IRS does not send unsolicited emails

Per IRS Tax Tips:

Be aware of e-mail scams that fraudulently use the IRS name or Logo as a lure. The goal of the scam is to trick people into revealing personal and financial information, such as Social Security, bank account or credit card numbers, which the scammers can use to commit identity theft and steal your money.

The IRS does not send unsolicited e-mails about a person’s tax account or ask for detailed personal and financial information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.

If you receive an e-mail from someone claiming to be the IRS or directing you to an IRS site,

• Do not reply.
• Do not open any attachments. Attachments may contain malicious code that will infect your computer.
• Do not click on any links. If you clicked on links in a suspicious e-mail or phishing Web site and entered confidential information, visit our Identity Theft page on IRS.gov.

You can help shut down these schemes and prevent others from beingvictimized. If you receive a suspicious e-mail that claims to come from the IRS, you can forward that e-mail to a special IRS mailbox, phishing@irs.gov The e-mail must be forwarded using special instructions at IRS.gov, or it loses the encoding needed to track it to its source. The IRS can use the information, URLs and links in the suspicious e-mails you forward to trace the hosting Web site and alert authorities to help shut down the fraudulent sites. After you forward the e-mail to us, delete the message.

FREE Online Personal Finance Software

I've been looking around for the past few months for a inexpensive online personal finance software to replace my desktop version of Quicken.  I found two FREE offers - Mint.com and Quicken Online . For me Mint.com is the best for my situation.  Mint.com immediately pulls in your balances, purchases, stock trades, etc. to give you a complete picture of your finances. Mint.com connects securely with more than 7,000 US financial institutions, saving you hours of tedious data entry.  Quicken Online also does the same thing.  Here are the major differences that I have seen: 

• In Mint.com I can code a transaction to more than one category (split a transaction).  At this time Quicken Online does support splitting a transaction.  When I make a purchase at a grocery store, I generally buy more than just groceries.  There are usually 2 or more categories involved on a shopping trip.  I need to be able to split the transaction into multiple categories or it will completely throw off our family budget.
  
• In Quicken Online, you can enter upcoming transactions which allows you to track a current balance rather than waiting for items to clear accounts.  Mint.com doesn't currently offer entering upcoming transactions.  I keep a separate check register so I always know my checking account balance so this isn't as critical for me.

So, if you are looking to set up a budget to track your spending habits, here are two FREE options.

Colorado not mailing 2009 estimated payment booklet

For taxpayers who make estimated tax payments, the Colorado Department of Revenue announced that it will not mail 2009 individual estimated income tax payment forms. Instead, taxpayers may download the 2009 104EP forms from the Taxation Estimated Payments Web page. Another option is online estimated payments by credit card or echeck at www.Colorado.gov/paytax.  The state will save more than $50,000 by eliminating the printing and mailing costs associated with these estimated income tax payment forms.