President Obama just signed into law a bill allowing taxpayers to claim deductions on their 2009 tax returns for current donations to earthquake relief efforts in Haiti. Donations made through February 28, 2010 are eligible for inclusion on 2009 tax returns.
Here is another reason to prepare your tax return in February, rather than waiting until the last few weeks. If you have available cash, a heart for the people of Haiti, and would like to receive your tax benefit for that donation now, rather than having to wait another year, this is a great option.
Friday, January 22, 2010
Friday, January 9, 2009
2009 Relief for Retirees -- Minimum Distributions Waiver
On December 23, 2008, President Bush signed into law the Worker, Retiree and Employer Recovery Act of 2008. One important part of this law waives the normally mandatory "required minimum distributions" (RMDs) from retirement accounts such IRAs and 401(k) / 403(b) plans, for 2009.
This may benefit retirees in several ways. If a retiree doesn't need the cash in 2009, he can leave it in his retirement account to encourage future growth. Also, the retiree can forego withdrawing the funds at today's depressed market values.
This waiver only applies to 2009 distributions. It does not apply for 2008 distributions, even if withdrawn in early 2009 as permitted by law.
This may benefit retirees in several ways. If a retiree doesn't need the cash in 2009, he can leave it in his retirement account to encourage future growth. Also, the retiree can forego withdrawing the funds at today's depressed market values.
This waiver only applies to 2009 distributions. It does not apply for 2008 distributions, even if withdrawn in early 2009 as permitted by law.
Saturday, July 26, 2008
What the heck is a PLLC?
The accounting firm of Barry L. Holland, CPA officially became Barry L. Holland, CPA, PLLC on July 11, 2008 (our wedding anniversary -- how's that for timing?).
No, the PLLC does not stand for Pretty Lame Little Company. Rather, it means Professional Limited Liability Company. I formed the LLC as a positive step of growth. In Kentucky, LLCs for professions such as accounting, medicine, architecture, law, etc. are officially noted as PLLCs.
What does this mean for clients? Not much. Same professional attention, same outstanding service.
No, the PLLC does not stand for Pretty Lame Little Company. Rather, it means Professional Limited Liability Company. I formed the LLC as a positive step of growth. In Kentucky, LLCs for professions such as accounting, medicine, architecture, law, etc. are officially noted as PLLCs.
What does this mean for clients? Not much. Same professional attention, same outstanding service.
Saturday, June 28, 2008
AMT Relief? Don't hold your breath...
The extended debate over what to do about the Alternative Minimum Tax is continuing, with no foreseeable conclusion. On June 25, the US House passed HR 6275, the Alternative Minimum Tax Relief Bill of 2008. The bill would pay for the AMT relief by increasing the taxes paid by oil companies (an easy target right now) and hedge fund managers.
The Senate and White House both seem to be standing in the way of this particular bill, as they prefer to provide AMT relief without raising taxes on others. If anything actually gets signed into law, I believe it will be in late 2008 or early 2009, just in time to require more last-second (or too-late) changes to IRS' 2008 tax forms.
The Senate and White House both seem to be standing in the way of this particular bill, as they prefer to provide AMT relief without raising taxes on others. If anything actually gets signed into law, I believe it will be in late 2008 or early 2009, just in time to require more last-second (or too-late) changes to IRS' 2008 tax forms.
Saturday, May 3, 2008
Rebates (for real) & Tax Simplification (yeah, right...)
It's good to be back here "on the airwaves." Filing season isn't exactly conducive to news chasing, deep thinking, and the crafting of coherent blog posts.
Well, the Economic Stimulus rebate payments are now being distributed to qualifying taxpayers, based on their 2007 tax returns. While I do think the broad impact of this cash infusion into taxpayer pockets will provide the US economy with some level of buoyancy, I believe it is more important for each recipient to use the money for their own financial benefit. This is a great opportunity to reduce credit card or other high-interest debt, or to start or pad a savings account. I am firmly convinced that individuals taking steps to reduce their own debt levels will have an even greater positive impact on the US economy, in the long run.
Education tax benefits (Hope credit, Lifetime learning credit, tuition & fees deduction) are too complex for students and lower-income families, said a tax director with the General Accounting Office (GAO). [My tax peers in the higher-ed community could have told them that!] Michael Brostek made his observation in testimony before a Ways and Means subcommittee on May 1. Brostek said those benefits are sometimes missed, at least in part, because they are difficult to understand and use correctly. On tax returns from 2005, 19% of eligible filers did not claim those benefits, which would have averaged $219. I support any simplification efforts that won't reduce the available benefits to students and their families.
Well, the Economic Stimulus rebate payments are now being distributed to qualifying taxpayers, based on their 2007 tax returns. While I do think the broad impact of this cash infusion into taxpayer pockets will provide the US economy with some level of buoyancy, I believe it is more important for each recipient to use the money for their own financial benefit. This is a great opportunity to reduce credit card or other high-interest debt, or to start or pad a savings account. I am firmly convinced that individuals taking steps to reduce their own debt levels will have an even greater positive impact on the US economy, in the long run.
Education tax benefits (Hope credit, Lifetime learning credit, tuition & fees deduction) are too complex for students and lower-income families, said a tax director with the General Accounting Office (GAO). [My tax peers in the higher-ed community could have told them that!] Michael Brostek made his observation in testimony before a Ways and Means subcommittee on May 1. Brostek said those benefits are sometimes missed, at least in part, because they are difficult to understand and use correctly. On tax returns from 2005, 19% of eligible filers did not claim those benefits, which would have averaged $219. I support any simplification efforts that won't reduce the available benefits to students and their families.
Thursday, December 27, 2007
AMT "patch" finally becomes law
Yesterday, President Bush signed into law the one-year "patch" for the Alternative Minimum Tax (AMT). Congress finally passed it just before they adjourned for the holidays, knowing that a sizable chunk of the American public would be very unhappy if they had not.
While the AMT has affected about 4 million taxpayers each year, that number would have ballooned to about 25 million if this patch had not been passed. That's a lot of voters. Even with this last-minute passage, IRS has warned that many refunds will be delayed as they feverishly work to update their forms and systems.
Still, legislators will need to find a more permanent solution for the AMT dilemma within the next year. While unpopular and not the simplest tax to explain, the law is not entirely bad in its theory. Simply indexing the existing code for inflation would provide some level of long-term relief. I suspect, however, that taxpayers will push for a more massive overhaul, if not a total repeal. Either way, expect the party lines to be strongly observed, which means a lot more political rhetoric to be heard by you and me.
While the AMT has affected about 4 million taxpayers each year, that number would have ballooned to about 25 million if this patch had not been passed. That's a lot of voters. Even with this last-minute passage, IRS has warned that many refunds will be delayed as they feverishly work to update their forms and systems.
Still, legislators will need to find a more permanent solution for the AMT dilemma within the next year. While unpopular and not the simplest tax to explain, the law is not entirely bad in its theory. Simply indexing the existing code for inflation would provide some level of long-term relief. I suspect, however, that taxpayers will push for a more massive overhaul, if not a total repeal. Either way, expect the party lines to be strongly observed, which means a lot more political rhetoric to be heard by you and me.
Wednesday, December 5, 2007
AMT battle
The Capitol Hill battle over the Alternative Minimum Tax (AMT) continues, with leaders on all sides making loud statements. On Monday, President Bush challenged the just-returning Congress on four top priorities, one of which (#3) was to "patch" the AMT rules, without which an additional 25 million taxpayers will be negatively affected.
Earlier today, Senate Finance Committee Chairman Max Baucus (D-MT) also urged action, as Democrats and Republicans wrangle in seemingly typical political maneuvering. As Baucus stated, "We've already missed one deadline. The IRS sent the 2007 tax forms to the printer on November 16."
That means any change now passed by Congress and signed into law by the President will save money for many taxpayers, while making their tax filing process much more complicated, as they work with a set of suddenly outdated and incorrect forms.
Earlier today, Senate Finance Committee Chairman Max Baucus (D-MT) also urged action, as Democrats and Republicans wrangle in seemingly typical political maneuvering. As Baucus stated, "We've already missed one deadline. The IRS sent the 2007 tax forms to the printer on November 16."
That means any change now passed by Congress and signed into law by the President will save money for many taxpayers, while making their tax filing process much more complicated, as they work with a set of suddenly outdated and incorrect forms.
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