News & Events
2010 Tax Return Filing Delayed
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. 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.
Summit Accounting will prepare tax returns on schedule. However, if a tax return meets the above situation, we will not be able to file the return until the IRS begins acceptance. We will notify the client immediately upon learning when the IRS acceptance will begin.
First-Time Homebuyer Credit
Click here for information
Reporting Cash Receipts
Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, must be filed by anyone who receives $10,000 in cash in one transaction, or in two or more related transactions. Cash is defined as U.S. and foreign currency, money orders, traveler's checks, bank drafts, or cashier's checks of $10,000 or less. The due date for Form 8300 is within 15 days of the transaction.
The IRS has put together information on filing the Form 8300 at http://www.irs.gov/businesses/small/article/0,,id=159755,00.html
S-Corp Audits
S-Corporations are getting more audit scrutiny. About 5,000 will face line-by-line exams starting in October 2005. The IRS plans to use the results of these detailed compliance examinations to recalibrate its outdated audit selection formulas for S companies. Agents will watch out for cases where businesses pay little or no salary to owners in an attempt to minimize their employment tax liabilities.
News & Events
2010 Tax Return Filing Delayed
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. 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.
Summit Accounting will prepare tax returns on schedule. However, if a tax return meets the above situation, we will not be able to file the return until the IRS begins acceptance. We will notify the client immediately upon learning when the IRS acceptance will begin.
First-Time Homebuyer Credit
Click here for information
Reporting Cash Receipts
Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, must be filed by anyone who receives $10,000 in cash in one transaction, or in two or more related transactions. Cash is defined as U.S. and foreign currency, money orders, traveler's checks, bank drafts, or cashier's checks of $10,000 or less. The due date for Form 8300 is within 15 days of the transaction.
The IRS has put together information on filing the Form 8300 at http://www.irs.gov/businesses/small/article/0,,id=159755,00.html
S-Corp Audits
S-Corporations are getting more audit scrutiny. About 5,000 will face line-by-line exams starting in October 2005. The IRS plans to use the results of these detailed compliance examinations to recalibrate its outdated audit selection formulas for S companies. Agents will watch out for cases where businesses pay little or no salary to owners in an attempt to minimize their employment tax liabilities.