IRS goes Mobile with IRS2Go

reprinted from the IRS website

IRS has launched IRS2Go, a smartphone application that lets you interact with the IRS using your mobile device. IRS2Go reflects IRS' commitment to help you get the information you need—whenever you need it, wherever you are.

Get Your Refund Status
You can check the status of your federal income tax refund using IRS2Go. Simply enter your Social Security number, which will be masked and encrypted for security purposes, then select your filing status and enter the amount of your anticipated refund from your 2010 tax return. If you e-file your return, you can check your refund status within a few days. If you file a paper tax return, you will need to wait three to four weeks to check your refund status because it takes longer to process a paper return.

Get Tax Updates
You can also use IRS2Go to subscribe to filing season tax updates by entering your e-mail address to automatically get daily tax tips. Tax Tips can help you with your tax planning and preparation needs. They are issued daily during the tax filing season and periodically during the rest of the year. The plain English updates cover topics such as free tax help, child tax credits, the Earned Income Tax Credit, education credits and other topics.

Follow the IRS
Finally, you can use IRS2Go to sign up to follow the IRS Twitter news feed, @IRSnews. IRSnews provides the latest federal tax news, including information about tax law changes and important IRS programs.

Download the IRS2Go App
If you have an Apple iPhone or iTouch, you can download the free IRS2Go app by visiting the iTunes app store. If you have an Android device, you can visit the Android Marketplace to download the free IRS2Go app.

IRS2Go is a new way to provide you with information and tools. The IRS also uses YouTube and Twitter to share the latest information on tax law changes, initiatives, products and services through social media channels.

How to Get Your Prior Year Tax Information from the IRS

reprinted from the IRS website

Taxpayers who need certain prior year tax return information can obtain it from the IRS. Here are nine things to know if you need federal tax return information from a previously filed tax return.

1. There are three options for obtaining free copies of your federal tax return information – on the web, by phone or by mail.
   
   
2. The IRS does not charge a fee for transcripts, which are presently available for the current tax year as well as the past three tax years.
   
   
3. A tax return transcript shows most line items from your tax return as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes made after the return was filed.
   
   
4. A tax account transcript shows any later adjustments either you or the IRS made after the tax return was filed. This transcript shows basic data – including marital status, type of return filed, adjusted gross income and taxable income.
   
   
5. To request either transcript online, go to http://www.irs.gov and look for our new online tool called Order A Transcript. To order by phone, call 800-908-9946 and follow the prompts in the recorded message.
   
   
6. To request a 1040, 1040A or 1040EZ tax return transcript through the mail, complete IRS Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses, partnerships and individuals who need transcript information from other forms or need a tax account transcript must use the Form 4506T, Request for Transcript of Tax Return.
   
   
7. If you order online or by phone, you should receive your tax return transcript within 5 to 10 days from the time the IRS receives your request. Allow 30 calendar days for delivery of a tax account transcript if you order by mail using Form 4506T or Form 4506T-EZ.
   
   
8. If you still need an actual copy of a previously processed tax return, it will cost $57 for each tax year that you order. Complete Form 4506, Request for Copy of Tax Return, and mail it to the IRS address listed on the form for your area. Copies are generally available for the current year as well as the past six years. Please allow 60 days for actual copies of your return.
   
   
9. Visit http://www.irs.gov to determine which form will meet your needs. Forms 4506, 4506T and 4506T-EZ can be found at http://www.irs.gov or by calling the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

How recent Federal tax law may or may not change your Oregon tax return for 2010

Oregon tax law may or may not change this year, and this article helps to explain the process we are in with regards to filing 2010 state taxes. Only a small percentage of tax filers are affected by these changes, and everyone can file now and will get their refund if eligible. If Oregon tax law does change, which is not for certain yet, then amendments are easily done to the return. Please see the below article for an overview on what the situation is at present. Email the office at office@mbtaxpro.com with any questions, thanks!


reprinted from OregonLive.com

The holiday trimmings are cut and gone, the ham and cookies consumed. Time to gather your W-2s, taxes are due soon.

I know. I'm way ahead of you. Ducks fans, remotes glued to their hands, wouldn't deign pick up this column for days.

But Congress wrangled with the tax code so much last month, we all could use a reality check. Especially now that some of my tips in December no longer apply.

As we reported today, recent moves by Congress make the tax code more complex than Chip Kelly's playbook. Some Oregonians will have to add federal tax breaks back on Oregon returns, unless the state Legislature acts (preferably before spring training).

For the self-employed, small business owners, teachers, and parents paying college tuition -- this could be a good year to file a state extension.

No wonder individuals and businesses devote 6.1 billion hours a year to mollifying the tax man, according to IRS Taxpayer Advocate Service's Nina E. Olsen. Six of 10 individuals hire help to do it, and three in 10 use software.

The typical taxpayer spends $258 a year complying with this code, Olsen says. That's money you can't use to watch the BCS title game on a new LCD TV.

Olsen, by the way, is actively soliciting your comments on reforming taxes online.

"What would you be willing to give up," she asks on the site, "if you knew that others are giving up their breaks and the end result would be a much simpler system?"

Harry Reid, John Boehner: Will you listen? (No need to weep, John; just wondering.)

While you respond or switch pregame shows, I think it best NOW to highlight some of the wrinkles taxpayers face BEFORE we all start procrastinating and file our returns April 14.


Forms and filing

Tax deadline: For once, it might be OK to wait until April 14. This year, the feds and Oregon give us until 11:59 p.m. April 18 to file.

The reason: Emancipation Day. On April 16, 1862, President Abraham Lincoln signed D.C.'s Emancipation Act, making its residents the first freed in the nation.

The district commemorates the holiday, but this year it falls on a Saturday. That means the public holiday is April 15. The IRS will be closed and, regrettably, unable to accept returns.

Emancipated! For three days!

Forms: You say you want austerity? The IRS will do its share by no longer mailing federal returns or instructions to you.

Last year, seven in 10 Americans filed returns electronically. Now the agency wants more of you to plug in. It'll save the IRS $10 million in printing and mailing costs, spokesman Richard Panick said, as well as reduce filing errors.

For those not on board or online, the agency will make paper forms available at libraries, by mail if you call 1-800-829-3676 and online.

Oregon is still mailing a quarter-million forms in 2010 (got mine on New Year's Eve) but only to those who filed paper forms last year. It's a good thing, too. Free e-filing wasn't as widely available to Oregon taxpayers as it was on the federal level.

This year, the state won't be depositing forms at local libraries or most post offices, Oregon Department of Revenue spokesperson Rosemary Hardin said. But you can always call 1-800-356-4222 to request one, she said.

Other breaks

No tax on long-term capital gains and qualified dividends: For those in the 10 and 15 percent tax brackets, Congress will, until 2012, allow you to sell your stocks, bonds or mutual fund assets that you've owned for more than 12 months without taxing you on the gains.

For 2010, the 15 percent tax bracket includes singles or married couples filing separately with taxable incomes of $34,000 or less. Couples filing jointly fall into the lower brackets if their taxable incomes fall below $68,000.

Taxable income is your adjusted gross income minus deductions. Capital gains assets include stocks, bonds, mutual funds, furniture, even classic cars. Qualified dividends shelled out by stocks and mutual funds also avoid taxation.

Oregon residents, however, will still owe income tax on those gains, usually at a rate of about 9 percent.

And be careful. A couple who sell a lot of stock and push their taxable income above the $68,000 tax-bracket ceiling ($34,000 for singles) might end up paying capital-gains tax on the amount that exceeds the tax-bracket threshold.

Seniors with lower incomes who sell a lot of long-term capital gains could end up with enough income to have to pay taxes on half or most of their Social Security benefits. Figuring this out is complicated, so consult your tax adviser.

Sales tax deduction: Washingtonians, rejoice. You'll get to deduct sales tax if you itemize. Congress extended that break, which seems about to expire every year.

Home energy credits: Congress extended for two years the Nonbusiness Energy Property Credit set to expire Dec. 31.

Unfortunately, it also toned it down.

The credits, part of the 2009 stimulus package, are now good for 10 percent (down from 30 percent) of the amount spent on such improvements as new heating and cooling equipment, insulation and roofing, up to $500. But Congress limited some incentives on certain improvements to $300 or less, including windows, water heaters and gas furnaces.

It also resurrected credits for builders of highly efficient new homes. Visit energytaxincentives.org for details.

Estate tax: Yes, Congress changed the estate tax rules. You don't really need to worry unless you inherited assets worth more than $5 million last year. If you did, you best seek advice from an accountant or estate-planning attorney to figure out your strategy. Oregon's inheritance tax still kicks in after only $1 million in inheritance.

Mileage Rates and Bonus Depreciation

The standard mileage allowance for business driving inches up for 2011.
The rate increases to 51¢ per mile, up 1¢ from 2010. For medical travel
and moving, the allowance is 19¢ per mile, a 2½¢ hike. For charitable driving...14¢.

Businesses of any size can claim 100% bonus depreciation for new assets
put in service this year. Only assets with useful lives of 20 years or less will qualify, including machinery, land improvements and farm buildings. Used assets are eligible for regular expensing, even though they don’t get bonus depreciation. Up to $500,000 can be expensed. This phases out once $2 million in total assets are put in service

reprint from Kiplinger.com

Tax Breaks Can File Starting in Mid- to Late February

reprinted from the IRS Website

For most taxpayers, the 2011 tax filing season starts on schedule. However, tax law changes enacted by Congress and signed by President Obama in December mean some people need to wait until mid- to late February to file their tax returns in order to give the IRS time to reprogram its processing systems.

Some taxpayers – including those who itemize deductions on Form 1040 Schedule A – will need to wait to file. This includes taxpayers impacted by any of three tax provisions that expired at the end of 2009 and were renewed by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act Of 2010 enacted Dec. 17. Those who need to wait to file include:

• Taxpayers Claiming Itemized Deductions on Schedule A. Itemized deductions include mortgage interest, charitable deductions, medical and dental expenses as well as state and local taxes (add link to Schedule A). In addition, itemized deductions include the state and local general sales tax deduction that was also extended and which primarily benefits people living in areas without state and local income taxes. Because of late Congressional action to enact tax law changes, anyone who itemizes and files a Schedule A will need to wait to file until mid- to late February.
• Taxpayers Claiming the Higher Education Tuition and Fees Deduction. This deduction for parents and students – covering up to $4,000 of tuition and fees paid to a post-secondary institution – is claimed on Form 8917. However, the IRS emphasized that there will be no delays for millions of parents and students who claim other education credits, including the American Opportunity Tax Credit extended last month and the Lifetime Learning Credit.
• Taxpayers Claiming the Educator Expense Deduction. This deduction is for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250. The educator expense deduction is claimed on Form 1040, Line 23 and Form 1040A, Line 16.

In addition to extending those tax deductions for 2010, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act also extended those deductions for 2011 and a number of other tax deductions and credits for 2011 and 2012 such as the American Opportunity Tax Credit and the modified Child Tax Credit, which help families pay for college and other child-related expenses. The Act also provides various job creation and investment incentives including 100 percent expensing and a two-percent payroll tax reduction for 2011. Those changes have no effect on the 2011 filing season.

The IRS will announce a specific date in the near future when it can start processing tax returns impacted by the recent tax law changes. In the interim, taxpayers affected by thesetax law changes can start working on their tax returns, but they should not submit their returns until IRS systems are ready to process the new tax law changes. Additional information will be available at www.IRS.gov.

For taxpayers who must wait before filing, the delay affects both paper filers and electronic filers. The IRS urges taxpayers to use e-file instead of paper tax forms to minimize confusion over the recent tax law changes and ensure accurate tax returns.

Except for those facing a delay, the IRS will begin accepting e-file and Free File returns on Jan. 14. Additional details about e-file and Free File will be announced later this month.

2010 NEW Tax Law Summary

reprinted from Business Accounting Insider, 12/29/10

The following provides a brief summary of some of the tax provisions of the Tax Relief, Unemployment Insurance Re-authorization, and Job Creation Act of 2010 (2010 Tax Relief Act) as signed into law by President Obama on December 17, 2010.

Tax Rates

Individuals’ taxable income will continue to be subject to six tax rates, 10, 15, 25, 28, 33 and 35 percent through 2012. Also, the expanded 15percent bracket for married joint filers, to provide marriage penalty relief, is extended through 2012. Estates’ taxable income will continue to be subject to five tax rates, 15, 25, 28, 33 and 35 percent through 2012.

Capital Gains and Qualified Dividends Rates

The uncertainty surrounding planning for capital gains is temporarily over as the 2010 Tax Relief Act has extended the 0 and 15 percent rates on adjusted net capital gains through 2012. Also extended is the treatment of qualified dividend income as adjusted net capital gain, taxable at the same 0 and 15 percent maximum rates through 2012. The Act also extends the 0 and 15 percent AMT rates on adjusted net capital gains through 2012.

Employee’s Payroll Tax Reduction

In place of the Making Working Pay Credit, the 2010 Tax Relief Act reduces the employee portion of Social Security taxes from 6.2 to 4.2 percent for 2011 wages (2011 only). The employer portion remains at 6.2 percent. A similar rate reduction applies to the railroad retirement tax.

Self-Employed SECA Tax Changes

The 2010 Tax Relief Act reduces self-employed individuals’ SECA tax from 12.4 percent to 10.4 percent for earned income in 2011. In addition, the above-the-line deduction for SECA taxes paid is increased from 50 percent to 59.6 percent for 2011 (2011 only).

Estate and GST Tax and Basis

The 2010 Tax relief Act reinstates the estate and Generation-Skipping Transfer (GST) taxes for decedents dying, and transfers made, after December 31, 2009. As a result, estates of decedents dying in 2010 are subject to the estate tax, unless the executor elects to have the carryover basis rules apply instead. If the executor does not make the election, the recipient of property will receive date-of-death fair market value basis under the basis rules and will be subject to estate tax. If the carryover basis is not elected, the lifetime exclusion amount for estates of decedents dying in 2010 is $5 million. The Act also provides that, for generation-skipping transfers made in 2010, the applicable tax rate is zero (congress gave this provision so as not to penalize taxpayers who relied on the repeal of the GST tax in 2010 before enactment of this law).

Estate and GST Extension of Time to File, Pay, and Make Disclaimers

The 2010 Tax Relief Act provides that, for estates of decedents dying after December 31, 2009 and before December 17, 2010, the due date for (1) filing an estate tax return, (2) paying the estate tax, and (3) making a disclaimer of an interest in property passing by reason of the decedent’s death, is nine months after December 17, 2010. Likewise, for any generation-skipping transfers made after December 31, 2009 and before December 17, 2010, the due date for filing any GST tax return, including any election required to be made on the return, is nine months after December 17, 2010.

Estate and GST Tax Exemption

The 2010 Tax Relief Act provides that, for estate of decedents dying after 2010, the applicable exclusion amount is the sum of (1) the “basic exclusion amount” ($5 million for estates of decedents dying in 2011) and (2) in the case of a surviving spouse, the “deceased spousal unused exclusion amount.” For estates of decedents dying after 2011, the $5 million basic exclusion amount will be increased by cost of living adjustments. The Act equates the GST tax exemption to the “basic exclusion amount” of $5 million, indexed for inflation, without regard to the “deceased spousal unused exclusion amount.”

Maximum Estate and Gift Tax Rate

The maximum estate and gift tax rate for transfers over the lifetime exclusion is 35 percent for 2010 through 2012. Under the 2010 Tax Relief Act, for gifts made in 2010, the lifetime exclusion is $1 million. However, for gifts made after December 31, 2010, the gift tax lifetime exclusion reunifies with the estate tax lifetime exclusion of $5 million.

Estate Tax Exclusion Portability

Under the 2010 Tax Relief Act, any applicable exclusion amount that remains unused as of the death of a spouse who dies after December 31, 2010 generally is available for use by the surviving spouse, as an addition to the surviving spouse’s applicable exclusion amount. A deceased spousal unused exclusion amount may not be taken into account by a surviving spouse unless the executor of the estate of the deceased spouse files an estate tax return on which the amount is computed, and makes an election on the return that the amount may be taken into account by the surviving spouse. The election, once made, is irrevocable and must be timely filed. The GST exemption is not portable.

AMT Patch

Congress has come through with another AMT “Patch” that increased the individual AMT exemption amounts for 2010 and 2011. These amounts will increase for inflation in 2011. The AMT exemption amounts for 2010 are:

• $72,450 (up from $70,950 in 2009) for married couples filing a joint return and surviving spouses
• $47,450 (up from $46,700 in 2009) for an individual who isn’t married or a surviving spouse
• $36,225 (up from $35,475 in 2009) for married individuals filing separate returns

Nonrefundable Personal Credits Can Off-Set AMT

The 2010 Tax Relief Act allows an individual to offset entire regular tax liability and AMT liability by the nonrefundable personal credits for 2010 and 2011, i.e. the child tax credit, dependent care credit, lifetime learning credit, American opportunity tax credit, etc.

Child Tax Credit

The 2010 Tax Relief Act extends provision that the $1,000 per child amount of the Child Tax Credit and the earned income formula for determining the refundable portion of the credit are extended through 2012.

Non-Business Energy Property Credit

The 2010 Tax Relief Act extends the credit for one year and restores the amount to 10% of the amounts paid for qualified energy efficiency improvements and the amounts paid for residential energy property expenditures. The Act allows the credit for windows, skylights, and doors that meet Energy Star standards and efficiency standards for furnaces, boilers, and stoves.

Personal Exemption Phase-Out and Overall Limitation on Itemized Deductions

Set to expire after 2010, the Act reinstates the personal exemption phase-out rules through 2012 and the limitation of itemized deductions through 2012.

Standard Deduction Marriage Penalty Relief

The 2010 Tax Relief Act increases the standard deduction for a married couple filing a joint return to twice the basic standard deduction for an unmarried individual through 2012.

Election to Claim Itemized Deduction for State/Local Sales Tax

The 2010 Tax Relief Act retroactively extends the provision to allow taxpayers to deduct state and local sales taxes in lieu of state and local income taxes through 2011.

Educational Credit and Deductions

The Act extends the American Opportunity Tax Credit (AOTC) for higher education expenses through 2012. The maximum AOTC is $2,500 per eligible student per year. The credit is allowed for each of the first four years of a student’s post-secondary education and 40% of the credit is refundable. One item to note is that the Act removed computer expenses from the list of qualified eligible expenses for the credit. The 2010 Act also extends the Qualified Tuition Deduction through 2011 and the Student Loan Interest Deduction through 2012.

Bonus Depreciation and AMT Depreciation Relief

The bonus depreciation rate is 100 percent for qualifying property that is (1) placed in service and acquired after September 8, 2010 and before January 1, 2012, or (2) acquired after September 8, 2010 and before January 1, 2012, but placed in service before January 1, 2013 if the property is qualified aircraft or long-production-period property. In addition to extending the eligibility period for bonus depreciation, the extension of the placed-in-service deadline also extends the eligibility period for obtaining exemption from the AMT depreciation adjustment. For 2012, bonus depreciation reverts back to 50 percent and it is the last year bonus depreciation is available.

15-Year MACRS Depreciation for Qualified Improvement Property

The 15-year recovery period for qualified leasehold improvements, qualified retail improvements, and qualified restaurant improvement property has been extended retroactively for 2010 through 2011.

Research Credit

The 2010 Tax Relief Act extends the research credit retroactively for 2010 through 2011. The credit is generally equal to 20 percent of the amount by which the taxpayers’ qualified research expenses exceed a specific base amount unless the taxpayer elects the alternative simplified credit.

New Markets Tax Credit

For qualified equity investments in a qualified community development entity, the New Markets Tax Credit has been extended through 2011, subject to a $3.5 million maximum annual amount.

Tax-Free IRA Distributions Donated to Charity

The 2010 Tax Relief Act extends the exclusion that allows taxpayers to exclude from income up to $100,000 of qualified charitable distributions from an IRA or Roth IRA through 2011. A qualified charitable distribution is any otherwise taxable distribution from an IRA or Roth IRA that is made directly by the IRA trustee to a qualified charitable organization (certain organizations don't qualify) and is made on or after the date on which the individual whose benefit the IRA is maintained has attained age 70^1/2. Under a special rule, an IRA owner may elect to treat qualified charitable distributions made during January 2011 as though they were made during 2010.

The information contained in this article does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This information is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer.