Dasmah Accounting

It’s the Most Wonderful Time of the Year….Tax Prep 2010!

Posted on December 3, 2010

The holiday season is quickly approaching and dasmah Accounting wants to wish you, your family and friends great holidays. The downside is that also means that the tax season is also approaching. Although not all of the details have been worked out, we know that there will be taxes. There are a few things that we do know for sure. Once the legislation has been passed we will let you know what the changes are and what you need to carefully watch.
There is a bill in congress now called the Tax Extenders Act of 2009 which would extend through 2010 more than forty tax provisions that expired at the end of 2009. Some of the extensions are:
1) Extension of the additional standard deduction for real property taxes.
2) Extension of the above-the-line deduction for qualified tuition and related expenses
3) Extension of the above-the-line deduction for certain expenses of elementary and secondary school teachers.
4) The provisions for general disaster tax-relief provisions

Those of you who own shares of a S-Corporation need to be aware that even though House Bill H.R. 4213 failed. This bill would have made all profit from a S-Corporation subject to self-employment tax. Expert sources indicate that eventually some similar bill will be passed by Congress, so we will try to keep you posted.

The adoption credit increased by $1,000 starting in 2010, and the maximum dollar limit will be phased out after December 31, 2010. Health insurance for your children to age 26 can be insured on your policy starting in January 2011. Enrollment will depend on the policy anniversary date.

Those that have a 529 plan or are interested in starting one the ARRA (American Recovery and Reinvestment Act of 2009) allows computer/computer software expenses as long as they are associated with the student’s education. Tuition credit can be as high as $4,000, but there are restrictions on costs above $2,000.

Last year many of you received a refundable credit of either $400 or $800 (some might have received less because of the earned income level). That credit is available for 2010. Mortgage forgiveness is available if you can qualify (cancellation-of-debt income). Due to a high rate of fraud, returns are being checked more carefully by the IRS and you must have a 1099-C. If you are trying to qualify for purchasing a home credit, then be sure that you have a signed copy of the HUD-1 Settlement Statement. There are other qualifying restrictions, so have all of your information ready when you meet with your accountant or with us.

We’ve just highlighted some items for you to consider without going into any great detail but if you want more information, please contact us.

Again have a great Holiday Season – Paul Spears, Rachel Larsen, and Sharon Price