The corporate and individual extended due date is rapidly approaching. Corporate returns on extension are due September 15th and Individual, partnership and trust returns on extension are due October 15th. If you have a return on extension, now is a good time to be getting that information together and in to us in order to avoid the rush of a last minute filing.
Extended due dates for Partnerships and Trusts reduced:
Beginning with the 2009 filing season, the extension for partnerships and trusts will now be 5 months. The prior extension of 6 months put the extended due date at October 15th. The IRS has changed it in order to relieve individual taxpayers who typically have to wait to receive K-1s. The new extension deadline will make the returns due by September 15th and will be one month earlier than the extended individual returns are due.
Housing relief bill enacted provides a first-time home buyer credit and a property tax deduction for non-itemizers:
The recently enacted housing relief bill includes a couple of tax payer incentives of note.
The first is a property tax deduction for 2008 capped at 1,000 dollars for married taxpayers filing joint and 500 dollars for single taxpayers. This is a deduction in addition to the standard deduction and is available for taxpayers that do not itemize. This is a one year deduction and is only available for the 2008 tax year.
The second is a tax credit of up to 7,500 dollars for first time home buyers who purchase a main home after April 8, 2008 and before July 1, 2009. To qualify you must not have owned a principal residence in the US in the last 3 years. The credit is phased out for married filing joint taxpayers with adjusted gross income between 150,000 and 170,000 and for single taxpayers with AGI between $75,000 and $95,000. An important issue to note however is that the tax credit is recaptured ratably over a 15 year period (interest free) starting 2 years after the year the credit is claimed. Taxpayers who purchase a home in 2009 can elect to take the credit on their 2008 tax returns. Thus, if you buy a house in the time period listed above, qualify for the 7,500 credit and claim it on your 2008 tax return then starting in 2010 you must pay an additional 500 dollars in tax each year for the next 15 years. If you sell your house before the credit is paid back then you must include in income the lesser of the gain on the sale or the unrecaptured balance of the credit.
More guidance will be released as we get closer to the filing season and we will keep you informed as we get more information.
This month’s tax and Business Alert:
This month’s Tax and Business Alert as usual has several interesting and timely issues in it. Of particular interest are the following:
• Business vs. Hobby comparison
• Required Minimum distributions from IRAs
• Depreciation rules for business vehicles
Check it out at the link below for more information.
As usual, at the bottom of the page you will find the link to our current and past newsletters as well as a link to the Tax and Business Alert referenced above. If you have any questions about the information given this month, please feel free to contact us.
