The Benefits of Filing an Extension...

The tax deadline is right around the corner and you might be still working on gathering your tax documents. No need to stress- you can extend! There are really almost no cons to extending your return, unless of course you are expecting a huge refund. Most of our clients (that have been with us for more than a year) will not be expecting huge refunds, since we take the extra time as a part of our service, to review and adjust your tax withholdings and estimated payments for the following year. Why leave your money on deposit with the government? They will just use it to bail out another failing American institution…while your family continues to struggle to earn and save and realize the American dream!

eeCPA PLC is different in that rather than just looking at historical data and making estimates based on that data, we actually take a forward looking approach to anticipate new changes in your business or financial life. Further, by staying on top of the new tax law changes, we apply the new law to our forward-looking calculations to save you from paying more tax than you should.

The Myths of Extension…

Filing on time does not yield any substantial benefit for you. In fact, it is often a benefit to extend your returns. Many times a thorough analysis will yield greater tax savings for you. When you do not receive your tax documents until late February, there is just not enough time to thoroughly analyze all deductions and potential tax savings strategies for all clients in just 6 weeks. By extending, we can take more time in making meaningful recommendations to save you money.

Getting an extension of time to file is not viewed by the government like the teacher may have viewed your request for extension of homework. The government is well aware that it is impossible for tax professionals to prepare and file all of their clients’ returns within a six-week time frame. Extensions of time to file are now granted “automatically”. Times have changed, technology has changed, and business investments have all become more complex. It takes time to sort out some of these issues and make accurate calculations to provide proper reporting to the government.

If you would like to file an extension, please send any W-2s or 1099s you received for 2010 to our office. We can make an estimated calculation to determine whether there is any tax due by April 18, 2011. Please contact us if you have any questions!

Energy Efficiency Tax Credits: Get Some Green for Being Green!

Did you make any energy efficient improvements to your home in 2010? The federal government will reward you for your environmentally friendly efforts! If you purchased any energy-efficient property for your principal residence by December 31, 2010, you could be entitled to the Federal Tax Credit for Consumer Energy Efficiency. In order to claim the credit, the improvement must be placed in service in 2010. The tax credit allows you to claim up to 30% of the cost of the improvements up to the limit of $1,500. Qualifying improvements include windows and doors, biomass stoves, HVAC units, insulation, roofs, and water heaters. If you think you might qualify, please send us copies of your receipts and manufacturer’s statement so we can submit the request for the tax credit on your returns.

If you make an energy efficient improvement to your home in 2011, you can still receive a tax credit, albeit at a lower level. The 2010 Tax Relief Act extended the home energy-efficiency tax credit into 2011. Instead of the 30% credit with the $1,500 credit, the levels are now 10% up to $500, with a $200 maximum for windows.

1099 Repeal Passed by Senate-“A Victory in Common Sense”

On Tuesday, April 5^th, the Senate passed a bill that would repeal the 1099 reporting requirements outlined in the Health Care Act and Small Business Jobs Act. The bill is now directed to President Obama for signature. Both parties supported the bill with a lopsided 87 to 12 vote. Senator Mike Johanns of Nebraska stated the passing of the bill was a “victory in common sense.”

In order to offset the $22 billion projected lost revenue from the Health Care Act, the House offered a measure based on the subsidies people receive to purchase health insurance under the Health Care Act. The House’s proposal will require taxpayers who receive a larger subsidy that they are allowed to return the overpayment to the government. Democrats call this proposal a tax increase on the middle class so this measure will likely be debated. For right now, we can at least celebrate the repeal of this unnecessary administrative burden!