February 2010 Newsletter
Bangerter, Lund & Associates, Inc.
Since the beginning of this month, you may have received many “important tax forms” in your mailbox. If you have any questions on the information you receive, please feel free to give us a call.
For Your Information
Investment tax documents delayed: We have found that a few portfolio and stock investment firms have filed for an extension of time to mail out Forms 1099-INT, 1099-DIV, and 1099-B. These forms are expected to be mailed on Monday, February 15th. If you have not yet received these forms from your broker, you may see them shortly after this February 15th extension date. Please remember, we cannot accurately file your return without these tax forms – the monthly activity statements, even with year-to-date information, are not acceptable to the IRS for tax return preparation purposes.
Any cash contribution made after January 11, 2010, and before March 1, 2010 for the relief of victims in areas affected by the January 12, 2010 earthquake in
Taxpayers donating to
Taxpayers have the option of deducting these contributions on either their 2009 or 2010 returns but not both.
A new era in Roth IRAs: Starting in 2010, everyone can convert a traditional IRA to a Roth IRA, regardless of income. You will owe income tax on a Roth IRA conversion, but if you convert in 2010 you can elect to defer the tax payments to 2011 and 2012. To make a Roth IRA conversion successful, you should pay the tax with non-IRA funds. Doing so will avoid reducing the account and maximize potential tax-free growth. Why a Roth IRA? After 5 years and after you reach age 59 ½, all Roth IRA distributions are tax free. If your traditional IRA has lost value, you will owe less taxes on a Roth IRA conversion. Because the broad
When you prepare to file your tax return, there are two things that will factor into your tax situation: dependents and exemptions. Here are five important facts the IRS wants you to know about dependents and exemptions before you file your 2009 tax return.
1. If someone else claims you as a dependent, you may still be required to file your own tax return. Whether or not you must file a return depends on several factors, including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and, any advance Earned Income Tax Credit payments you received.
2. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2009 tax return. Exemption amounts are reduced for taxpayers whose adjusted gross income is above certain levels, depending on your filing status.
3. If you are a dependent, you may not claim an exemption. If someone else – such as your parent – claims you as a dependent, you may not claim your personal exemption on your own tax return.
4. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.
5. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children.
Cash for Clunkers: Did you participate in this program and receive a $3,500-4,500 voucher or payment? This income is not taxable.
Looking to make your existing home more energy-efficient? There’s a tax credit of $1,500 available if you spend at least $5,000 on qualifying improvements to your principal residence. If you are in the process of building a principal residence, you can get even more credit for installing solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property.
The IRS standards have increased significantly since the previous energy credit. Usually, only items of significantly higher cost will qualify for the IRS credit.
Look at the manufacturer’s tax credit certification statement before purchasing or installing any improvements. These certification statements can usually be found on the manufacturer’s Web sit or the product packaging. Remember that this certification is not the same as the Department of Energy’s Energy Star label. Not all Energy Star labeled products qualify for IRS tax credits.
W-4 information: If you claimed exemption from income tax withholding last year on the Form W-4 you gave your employer, you must file a new Form W-4 to continue your exemption for another year.
The filing deadline for Corporations and S-Corporations is March 15th.
Unemployment Income: The first $2,400 of any unemployment compensation you received in 2009 is not taxable.
Save Money on QuickBooks Products
If you are considering purchasing any 2010 QuickBooks software, services or supplies, please let us know. As a Certified QuickBooks ProAdvisor® we are entitled to discounts on these items and services for our clients who order through our office. We will place your order for you for free, and you pay only what we pay for the product.
As always, if you have any questions we are happy to answer them for you. Please give our office a call at (801) 397-1000 between 8am and 5pm, weekdays.
Sincerely,
Bangerter, Lund & Associates, Inc.
