Travis Raml, CPA - Blog

IR-2009-42, April 16, 2009

WASHINGTON — The tax credit for hybrid passenger automobiles and light trucks manufactured by Ford Motor Company has begun to phase out for purchases made after March 31, 2009.

Taxpayers may claim the full amount of the credit only on purchases made before April 1, 2009, because the total number of vehicles sold reached the 60,000 vehicle threshold in the last quarter of 2008. The cumulative sales of qualified Ford hybrid vehicles sold from the period of Jan. 1, 2006, to Dec. 31, 2008 is 66,157.

For vehicles purchased for use or lease on or after April 1, 2009, and on or before Sept. 30, 2009, the credit is 50 percent of the full amount. For vehicles purchased for use or lease on or after Oct. 1, 2009, and on or before March 31, 2010, the credit is 25 percent of the full amount. For vehicles purchased for use or lease on or after April 1, 2010, no credit is allowable.

The full credit amount for vehicle purchases made prior to April 1, 2009 is:

* 2005, 2006, 2007 Ford Escape 2WD, $2,600;
* 2008, 2009 Ford Escape 2WD, $3,000;
* 2005, 2006, 2007, 2009 Ford Escape 4WD, $1,950;
* 2008 Ford Escape 4WD, $2,200;
* 2010 Ford Fusion, $3,400;
* 2008, 2009 Mercury Mariner 2WD, $3,000;
* 2006, 2007, 2009 Mercury Mariner 4WD, $1,950;
* 2008 Mercury Mariner 4WD, $2,200;
* 2010 Mercury Milan, $3,400

http://www.irs.gov/newsroom/article/0,,id=206579,00.html

It’s a moment many taxpayers dread. A letter arrives from the IRS — and it’s not a refund check. Don’t panic; many of these letters can be dealt with simply and painlessly.

Each year, the IRS sends millions of letters and notices to taxpayers to request payment of taxes, notify them of a change to their account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return. Each letter and notice offers specific instructions on what you are asked to do to satisfy the inquiry.

If you receive a correction notice, you should review the correspondence and compare it with the information on your return.

* Agree? If you agree with the correction to your account, usually no reply is necessary unless a payment is due.
* Disagree? If you do not agree with the correction the IRS made, it is important that you respond as requested. Write to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.

Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the correspondence available when you call to help us respond to your inquiry.

Be sure to keep copies of any correspondence with your records.

For more information about IRS notices and bills, see Publication 594, What You Should Know about the IRS Collection Process. Information about penalties and interest charges is available in Publication 17, Your Federal Income Tax. Both publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Issue Number: TT-2009-72
Information provided by the IRS newswire service

Well one thing is likely for certain, small business or businesses for that matter are likely looking at higher taxes in the not so distant future. It is to early to know there final form but they will likely occur in one of the following areas: increased taxes on dividends, increased capital gain rates, increased income tax rates for individuals, or tax rate limitation on deductions.

Thanks,
Travis Raml, CPA

Education tax credits can help offset the costs of higher education for yourself or a dependent. The Hope Credit and the Lifetime Learning Credit are two education credits available which may benefit you. Because they are credits rather than deductions, you may be able to subtract them in full, dollar for dollar, from your federal income tax.

For more information, see Publication 970, Tax Benefits for Education, which can be obtained online at IRS.gov or by calling the IRS at 800-TAX-FORM (800-829-3676).

Issue Number: TT-2009-30
Provided by the Internal Revenue Service (IRS)

While most income you receive is generally considered taxable, there are some situations when certain types of income are partially taxed or not taxed at all.

Information provided by the IRS Newswire Service
Issue Number: TT-2009-25

WASHINGTON ― 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.

Issue Number: IR-2009-011
Information provided by the IRS Newswire

Don’t wait around for a paper check. Have your federal tax refund deposited directly into your bank account. Choosing Direct Deposit is a secure and convenient way to get your money in your pocket faster.

Here are the main reasons 66 million taxpayers chose Direct Deposit in 2008:

1. Direct Deposit is secure. There is no chance for a check to get lost in the mail. Thousands of checks are returned to the IRS by the US Post Office every year as undeliverable mail. Direct Deposit eliminates the possibility you won’t receive your check and prevents your refund from being stolen.

2. Direct Deposit is convenient. The money goes directly into your bank account. You won’t have to make a special trip to the bank to deposit the money yourself.

3. Direct Deposit is easy. When you’re preparing your return, simply follow the instructions for “refund” on your return. Just make sure you entered the correct bank account and bank routing numbers on your tax form and you’ll receive your refund quicker than ever.

4. Direct Deposit offers options. You can also electronically direct your refund to multiple accounts. With the “split refund” option, taxpayers can divide their refunds among as many as three checking or savings accounts and three different U.S. financial institutions. A word of caution — some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your direct deposit will be accepted.

For more information about direct deposit of your tax refund and the split refund option, check the instructions for your tax form.

This and other helpful tips are available in IRS Publication 17, Your Federal Income Tax. To get a copy, visit the Forms and Publications section of the IRS Web site, IRS.gov, or call 800-TAX-FORM (800-829-3676).

Issue Number: TT-2009-19
Provided by the IRS Newswire service

I don’t mean to be insensitive because I know the economic challenges are tearing lives apart as we speak. However it must be known that these problems were all caused by people chasing the fast or easy money. The late 90’s and early 00’s it was stock regardless of fundamentals. Then it was real estate regardless of the fundamentals. Now its the bank because they forgot the fundamentals. Now its the consumers because they forgot the fundamentals of living on borrowed credit at lifestyles they could not support.

Thanks
Travis

Issue Number: TT-2009-10

Don’t delay; file your prior year return now! The failure to file a federal tax return can be costly — whether you end up owing more or missing out on a refund.

If you owe taxes, a delay in filing may result in a failure-to-file penalty and interest charges. The longer you delay, the larger these charges grow.

If you are due a refund and don’t file you could lose your refund. There is no penalty for failure to file if you are due a refund. However, you cannot obtain a refund without filing a tax return. If you wait too long to file, you may risk losing the refund altogether. The deadline for claiming refunds is generally three years after the return due date.

There are several reasons taxpayers don’t file their taxes. Perhaps you didn’t know you were required to file. Maybe, you just keep putting it off or simply forgot. Whatever the reason, it’s best to file your return as soon as possible. If you need help, even with a late return, the IRS is ready to assist you.

Here are some steps for filing your prior year return:

1. Gather prior year tax return information. You will need Social Security numbers, income information and records for expenses, deductions and credits.

2. Determine if you have a filing requirement. Whether or not you must file a tax return will depend upon a number of factors, including your filing status, age, and gross income. Individuals who are entitled to the Earned Income Tax Credit must file their return to claim the credit even if they are not otherwise required to file.

3. Get forms and publications. Make sure you get the forms and publications for the year of the tax return you are filing.

4. Prepare your tax return. Complete, sign and date your tax return. Be sure to attach any required schedules and forms.

5. Mail the completed and signed prior year return to the correct address. Mailing a return to an incorrect address can delay the processing of the return.

If your income was $42,000 or less, your local Taxpayer Assistance Center may be able to assist you in preparing your prior year return. You can locate your nearest center at http://www/irs.gov/localcontacts/index.html. For more information on how to file a tax return for a prior year, visit the IRS Web site at IRS.gov or call the IRS Tax Help Line for Individuals at 800-829-1040.

Information provided by the IRS Newswire Service

Issue Number: TT-2009-08

You probably already keep records in your daily routine. This includes keeping receipts for purchases and recording information in your checkbook. Keeping these and other records will help you avoid headaches at tax time. Good recordkeeping will help you remember the various transactions you made during the year, which in turn may make filing your return a less taxing experience.

Records help you document the deductions you’ve claimed on your return. You’ll need this documentation should the IRS select your return for examination. Normally, tax records should be kept for three years, but some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.

In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return:

* Bills
* Credit card and other receipts
* Invoices
* Mileage logs
* Canceled, imaged or substitute checks or any other proof of payment
* Any other records to support deductions or credits you claim on your return

Good recordkeeping throughout the year saves you time and effort at tax time when organizing and completing your return. If you hire a paid professional to complete your return, the records you have kept will assist the preparer in quickly and accurately completing your return.

For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Links:

* Publication 552, Recordkeeping for Individuals

Information provided by the IRS Newswire Service