Monday, November 23, 2009

Small Business Workshops for the Holiday Season

SMALL BUSINESS WORKSHOPS - Learn While You Play This Holiday

It is time for our end of year workshops and we have several coming up. The Small Business Workshop is designed to help business owners get more organized and become more profitable, and the topics include: Expenses, Documentation, Business Entities and Maximizing Profitability. We have great presenters, strong information, and would love for you to take advantage of this opportunity for free financial and Small Business advice. Our workshops are one hour long and have a maximum of 20 people so that you can have your individual questions answered. Feel free to invite others you feel could benefit from this workshop as well. Please RSVP to office@mbtaxpro.com to reserve your seat or call (503) 595-5890.

Move Up / Repeat Home Buyer Credit until June 30th, 2010

Move up / Repeat Home Buyer Tax Credit
Another exciting new tax law for home owners! The Worker, Homeownership, and Business Assistance Act of 2009 has established a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing home owners) purchasing a principal residence after November 6, 2009 and on or before April 30, 2010 (or purchased by June 30, 2010 with a binding sales contract signed by April 30, 2010). THIS MEANS that even if you don't qualify for the First Time Home Buyer Credit because you have been a homeowner for the past three years, you still have a chance to take advantage of a large tax credit if you want to buy a new home in the next six months. Please see below for questions and answers regarding this new tax credit available:

Q:Who is eligible to claim the $6,500 tax credit?
A:Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit.

Q:What is the definition of a move-up or repeat home buyer?
A:The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.

Q:How is the amount of the tax credit determined?
A:The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit.

Q:Are there any income limits for claiming the tax credit?
A:Yes. The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

First Time Home Buyer Credit Extended to June 30th, 2010

First-Time Homebuyer Credit
Did you think you missed the boat on the first time home buyer credit of $8,000 that was being offered by the IRS until December 1st, 2009? Great news! Homebuyers who purchased a home in 2008, 2009 or 2010 now have until June 30th, 2010 to be eligible for the first-time homebuyer credit. This credit applies to taxpayers who have not owned a home in the past 3 years and who are buying their new home to be used as a taxpayer's principal residence. This credit reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar. It is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed. Check out the article below for full details.

First-Time Homebuyer Credit
IR-2009-103, Nov. 17, 2009: New Legislation


WASHINGTON — New legislation, the Worker, Homeownership and Business Assistance Act of 2009, which was signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts. The new law: Extends deadlines for purchasing and closing on a home. Authorizes the credit for long-time homeowners buying a replacement principal residence. Raises the income limitations for homeowners claiming the credit. Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return. For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased. People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after Nov. 6, 2009. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers. The existing MAGI phase-outs of $75,000 to $95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov. 6, 2009. Several new restrictions apply to homes purchased after Nov. 6, 2009. Purchasers must attach a properly executed settlement statement to their return. No credit is available if the purchase price of the home exceeds $800,000. The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement. A dependent is not eligible for the credit. http://www.irs.gov/newsroom/article/0,,id=204671,00.html

Expanded Loss Carryback Option for All Businesses - NEW Legislation

Most Businesses May Take Advantage Of Expanded Loss Carryback Option Under New IRS Procedure
Small Businesses and Big Businesses alike can take part in the cheer this season with a new tax law passed this week. In light of the financial hit taken by businesses in general in the recent economic downturn, the IRS is allowing losses incurred during the economic downturn to reduce income from prior tax years to any taxpayer with business losses. See the article below for more information.
Most Businesses May Take Advantage Of Expanded Loss
Carryback Option Under New IRS Procedure
IR-2009-105, Nov. 20, 2009
WASHINGTON — Most businesses may use losses incurred during the economic downturn to reduce income from prior tax years, under a revenue procedure issued today by the Internal Revenue Service. The relief provided under the Worker, Homeownership, and Business Assistance Act of 2009 differs from similar relief issued earlier this year in that the previous relief was limited to small businesses. The current relief is applicable to any taxpayer with business losses, except those that received payments under the Troubled Asset Relief Program. The relief also applies to a loss from operations of a life insurance company. Taxpayers under the procedure may elect to carry back a net operating loss (NOL) for a period of three, four or five years, or a loss from operations for four or five years, to offset taxable income in those preceding taxable years. An NOL or loss from operations carried back five years may offset no more than 50 percent of a taxpayer's taxable income in that fifth preceding year. This limitation does not apply to the fourth or third preceding year. The procedure applies to taxpayers that incurred an NOL or a loss from operations for a taxable year ending after Dec. 31, 2007, and beginning before Jan. 1, 2010. http://www.irs.gov/newsroom/article/0,,id=215657,00.html