Here is the third and final business impact post on the 2009 tax law changes. The laws look to be in for the most part and what I covered in my previous two posts here and here should hold true. For more detailed information, you may want to check out the IRS website. For my thoughts on what is notable or what to concern yourself for your filing for this year, please read on.
In some respects, in keeping with the new Administration that is coming in, there will be relief for people who don’t have a lot of money, were nailed in a natural disaster, clobbered by losing a home and other situations that made 2008 a rough time for everybody. If you owe taxes because of loan forgiveness, credit card debt forgiveness that is taxable, you didn’t live in your primary residence a long enough time to get an allowance, etc, ask your tax professional to help you try to dig up any other legal credits or see what relief packages might apply to your specific situation.
If you end up owing taxes when all is said and done, take the time to work out a payment plan with the IRS and/or your respective state agencies. They are willing to work with you and despite what pundits say, they are human beings and a lot of them are going through the same problems that you or I might have experienced.
The level for due diligence has been raised for the tax professional. That means that items that might have been allowed to go through as an expense or under certain circumstances may be questioned and your tax professional may recommend that you don’t take the expense, etc because under the new laws, the IRS doesn’t want to see anything that has less than a fifty-fifty shot of being accepted as a legitimate business expense, etc. If you have the documentation, the substantiation from IRS rulings and know your tax law, go for it.
Education credits have been extended, make sure you research and check with your tax person if you are taking them correctly. If you are doing your own taxes, make sure that you research your situation and understand completely what you are filing out in the software before you submit anything. In fact, I would at this point wait till all software updates are finalized before filing. That may mean a few weeks for the Fed software and maybe longer for State software, depending on what other incentive rebates may be thrown into the mix once our President Elect gets sworn in.
I am also taking new clients if you would like me to do your taxes for you. If you are interested, drop me an email or post something in the comment section of the blog with your name, phone number and email.
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Kim Isaac Greenblatt
The latest installment on the tax law changes for 2009 in the Business Impact-Tax Law Changes For 2009 Part 3 post.