April 30, 2010

Dear Client:

Here is our May Newsletter.

IRS ramps up guidance on new small employer health insurance tax credit
The IRS is moving quickly to alert employers about a new tax credit for health insurance premiums. The recently enacted health care reform package (the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010) created the small employer health insurance tax credit. The temporary credit is targeted to small employers that offer or will offer health insurance coverage to their employees. The credit, like so many federal tax incentives, has certain qualifications. Please contact our office and we can arrange to review in detail how the credit may cut the cost of your business’s health insurance premiums. The dollar benefits of the credit are substantial and they apply immediately to 2010 premium costs.
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FAQ: Are individuals now required to purchase health insurance?
The answer is no for 2010, but yes, in practical terms, for 2014 and beyond. The health care reform package (the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010) does not require individuals to carry health insurance in 2010. However, after 2013, individuals without minimum essential health insurance coverage will be liable for a penalty unless otherwise exempt.
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More federal tax legislation expected soon
Congress returned from its spring recess in April to a full agenda of tax legislation that will impact individuals and businesses. Lawmakers are hoping to complete work on as many bills as possible before their Memorial Day recess but the Senate’s timetable may be slowed by many non-tax issues. Among the most pressing bills are a package of tax extenders and estate tax relief. Many taxpayers are also waiting to learn the fate of the 2001-2010 individual marginal tax cuts and the popular first-time homebuyer tax credit.
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IRS updates change-of-address notification procedures
If you have or are planning to move – whether it’s a change of personal residence or a change of business address – you want the IRS to know about your change of address. The IRS has recently updated its procedures for taxpayers to follow when notifying the IRS of a change of address. The IRS uses a taxpayer’s “address of record” for mailing certain notices and documents that the agency is required to send to a taxpayer’s last known address.
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How Do I: Claim residential energy credits?
There are two important energy tax credits that can benefit homeowners in 2010: (1) the nonbusiness energy property credit and (2) the residential energy efficient property credit. Collectively, they are known as the “home energy tax credits.” With the home energy tax credits, you can not only lower your utility bill by making energy-saving improvements to your home, but you can lower your tax bill in 2010 as well. Eligible taxpayers can claim the credits regardless of whether or not they itemize their deductions on Schedule A. Your costs for making these energy improvements are treated as paid when the installation of the item is completed.
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IRS examiners told to carefully observe operations of cash intensive businesses
The IRS has traditionally scrutinized cash businesses very carefully for tax evasion, and a recent update to its Audit Techniques Guide for cash businesses reinforces the agency’s proactive approach. The IRS reminded its examiners that their focus should be on probing the business for unreported income.
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