Wednesday, November 20, 2013

$2000 Energy Efficient Home Construction Credit Expiring Dec 31 2013

Builders of a dwelling unit certified to have annual heating and cooling consumption at least 50% below that of a "comparable dwelling unit" and meets related requirements as stated in IRS Notice 2008-35 have been eligible for a $2000 income tax credit since August 2005.  There is also a $1000 income tax credit available if the certified annual heating and cooling consumption is at least 30% below a "comparable dwelling unit".  Builders can claim this credit by completing IRS Form 8908 and attaching it to income your tax return.  (In some cases you can do the simpler IRS Form 3800.  Refer to Form 8908 instructions to determine if this applies to you.)

Homes that are substantially reconstructed and rehabilitated to these energy efficiency standards are also eligible for the credit.

If you are eligible for this credit, you will want to act quickly.  This home energy efficiency credit was scheduled to expire in 2010 and was extended three more years to the current expiration date of December 31, 2013.

The home builder for this purpose is the person who owns and has basis in the qualified energy efficient home during its construction.  If the owner hires a third party contractor to construct the home, and has basis in the home during construction, the person that hires the third party contractor is the one who is eligible to claim this credit.  This provision is carefully worded.  If you need help clarifying it, please be sure to get it!

The rules for certifying the reduced heating and cooling consumption are also spelled out in IRS Notice 2008-35, and include a requirement that it be done by an "eligible certifier", who is not related to the home builder and who had been accredited by the Residential Energy Services Network (RESNET) (or the equivalent rating network)

This credit for construction of new energy efficient homes is number 14 on a list of 55 expiring federal tax provisions.  (For the full list of these, prepared by the Congressional Joint Committee on Taxation staff, click here.)

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Tuesday, November 19, 2013

Watch Out: Principal Residence Debt Relief Tax Exclusion Expires 12-31-2013

"Generally, if you owe a debt to someone else and they cancel or forgive that debt for less than its full amount, you are treated for income tax purposes as having income and may have to pay tax on this income." This is how the IRS begins its discussion in Publication 4681 of your potential tax liability when you go through a debt cancellation, foreclosure, repossession, or abandonment.

When the debt is on your principal residence, there has been an important exception to this general rule ... an exception that is scheduled to expire December 31, 2013.  It is number 21 on a list of 55 expiring federal tax provisions.  (For the full list of these, prepared by the Congressional Joint Committee on Taxation staff, click here.)

If you owe substantially more money on your principal residence than it is worth, and you don't have the desire and the ability to continue making the required monthly payments, you may want to seriously consider getting out of the house now before 2013 ends and you possibly add a big tax bill to your pain.

Please give this some thought, and possibly take action after getting appropriate help.

Thursday, November 14, 2013

Payday Loan Addiction ... The Challenges And Possible Solutions

This will be primarily an audio blog post this time.  You never know what is going to come back around for you in life.  I went to elementary and junior high school with some great people, and the friendships continue all these years later.  One of them was Steve Fischmann, who went on to UCLA business school, a management career at Levi Strauss, and four years as a New Mexico State Senator.  He now works on a variety of projects including a weekly radio program out of Las Cruces that discusses local issues that seem to pop up pretty much everywhere.

One of the interests Steve and I share is trying to help people free themselves from the trap of payday, car title, and tax refund anticipation loans, as well as other predatory lending practices.  I'm as excited as anyone to see businesses succeed, in fact I've made a career out of helping people turn their business dreams into reality.  But ... as with any right, one's right to operate a business is limited by one's responsibility to not hurt the rights and opportunities of others.  These loans can be as addictive as any substance, as I have learned from hard experience over my 35 year career, as well as from life in general.

Steve did an hour segment of his radio show on this topic today.  His guest for the full day was

Saturday, October 19, 2013

The IRS is Reopening ... Slowly

Practical Note ... If you filed for a tax refund or a copy of a tax document (for example, to apply for a student loan, a mortgage, etc.) these requests are pretty much going to be handled in the order they were received beginning with those that came in October 1.

My expectation is that for at least the next month, perhaps through the holidays, these requests are likely to take 3-4 weeks longer than they ordinarily would.  Just sayin' ...

Please click here to read the official IRS statement on this:

Photo credit:  This work is in the public domain in the United States because it is a work prepared by an officer or employee of the United States Government as part of that person’s official duties under the terms of Title 17, Chapter 1, Section 105 of the US Code.

Monday, October 14, 2013

#Business #Travel #TaxDeduction #2013Update

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The Internal Revenue Service kept its per diem rates essentially unchanged in its Notice 2013-65 yearly update released shortly before the federal government partial shutdown.   Most small business taxpayers find the meals and incidential portion of these rules most useful, and they are unchanged at $65 per day for high cost locations and $52 per day everywhere else.  The transportation industry nationwide rate is also unchanged at $59 per day.

This blog went into a simplified discussion of these rules in April 2012, that description is still applicable and can be read here.  Sally P. Schreiber, J.D., goes into it in even more detail in a September 25, 2013 article in the Journal of Accountancy that can be read here.

If you would like the list of the high cost locations just published by the IRS, please click to continue reading.

Saturday, October 12, 2013

#WorthARead: #ClaytonMChristensen How Will You Measure Your Life?

And Then It Became This Book:

My son Benjamin had a meeting at work discussing goals the other day ... they gave him this Harvard Business Review article to read.

These excerpts, with highlighting by me, explain why it's worth your time to read it:

"If I had been suckered into telling Andy Grove what he should think about the microprocessor business, I’d have been killed. But instead of telling him what to think, I taught him how to think—and then he reached what I felt was the correct decision on his own."

"I ask my students to ... find cogent answers to three questions: First, how can I be sure

Wednesday, October 2, 2013

IRS Changes Its Mind On Issuing Refunds During Government Shutdown

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The following message has been posted to the IRS website:

"Due to the current lapse in appropriations, IRS operations are limited. However, the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.

"Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law. The IRS will accept and process all tax returns with payments, but will be unable to issue refunds

Wednesday, September 25, 2013

A Presentation About #OneForTheMoney by #MarvinJAshton

Elder Marvin J. Ashton of The Quorum of Twelve Apostles
of The Church of Jesus Christ of Latter-Day Saints
Marvin J. Ashton gave a talk, "One For The Money" in the April 1975 Welfare Session of The Church of Jesus Christ of Latter-Day Saints General Conference.  It has been reprinted numerous times and become a classic for his 12 Recommendations for Improved Personal and Family Financial Management.

I was asked to give a presentation based on this talk to a Preparedness Workshop sponsored by the church's La Verkin Utah Stake.  I used Elder Ashton's talk as my outline (and the full talk was one of the handouts provided each participant) and then added additional information that would help this particular audience.

Please click on the line below for my full presentation, in both a written as well as voice recording versions:

Saturday, September 21, 2013

#IncreasingSavingsPower through #PracticalShoppingTips

I recommend 2 bloggers: @BlissDomestic & @TheBudgetDiet. Both wrote practical 2012
posts: #CutYourGroceryBillInHalf.  

I hear all the time "I can't make ends meet as it is, there is no way I can save."  That's why I'm so excited about this -- you can definitely cut what you spend on food by $100 - $200 - $300 a month, depending on your family size, and eat better than you eat now!

Here's some of the top tips from these bloggers:

Wednesday, September 18, 2013

A Thought For Young People

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I hope each of you reading this considers yourself young! 

There were once two young people, trying to furnish their homes, get appliances, a living room and dinette sets, a television, a sound system, and a computer. Alas, when each of them priced these items after diligent shopping for “deals”, they discovered that the total was ten thousand dollars. They anguished with the thought that there was no way they could pay such a sum in cash, and so surely they wouldn’t be able to afford these things that they needed. 

The first young person went home and found an offer

Sunday, March 17, 2013

Sometimes Claiming All Your Legal Deductions Can Cost You More #Tax

Most of us are awed by the complexity of even our own seemingly simple tax situations ... Yahoo Finance has an article that has some comfort along with good advice for you:

An additional thought:  Try calculating it different ways before deciding on one.  You can often save money, even on the simplest returns.

Here's a recent example I helped with:

Friday, March 1, 2013

Sequestration: A Letter to Congress

Dear Congressman Matheson:

Thank you for the opportunity to give you input for the federal budget process as we reach the sequestration deadline.  I especially appreciate that you continue to reach out to those of us in the 2nd District that you represented for many years before beginning to serve the new 4th District beginning this year.  You never know how district boundaries or other opportunities will change, you are wise to continue to be interested in those of us you might once again have reason to work with.

I have been very interested in this topic for a long time, for example, I wrote the following blog post on February 18, 2011 when Congress was considering the budget for what was then the upcoming year.  (You can find it at if you would like to see it in its original context.)

It is given that there are a lot of hard choices here.  Anything that is decided tends to put the interests of one person or group of people in preference to those of another, always a difficult decision to make.

Please particularly note the part of my blog post where I present the major budget categories as then proposed by the President in dollars per person.  For me it helps put things in perspective.

It is also given there will be an impact to the overall economy if any cuts agreed to are too large.  Because of that I especially appreciate your strong desire to reach across the aisle and work to get the leaders on both sides to make some carefully considered movement.

Specific (Simple) Recommendations:

1.  Overall, I believe sequestration is a reasonable idea.  Let's assume for the moment that each and every federal government program is essential.  There is still efficiencies that could be realized in each program.  I would hope that the labor portion of those efficiencies could be achieved through attrition rather than furloughs, and believe they can.  It is sad that we could not agree on how to do this without sequestration, but believe that overall this is a way we can get started on what needs to be done year by year, in baby steps, for the next decade and beyond.

2.  There are individual programs that should be completely eliminated, in addition to implementing efficiencies in all programs.  How about trying for one a year, and starting with the Energy Department.  At $74.67 per person (at February 2011 proposed levels) this isn't huge, but that's what we need.  A little at a time.  It is fair to say that the Energy Department has not met the objectives it was set up to accomplish when it was established over 30 years ago.  Please work to cut that department by 50% by eliminating it as a separate department along with many of its agencies.  The surviving 50% of its budget could be added to the budget of the Interior Department, which would likely absorb the programs that most need to remain.

Thank you for seriously considering my input.  I know I am one voice out of many, and each of us do count.  I know you personally recognize that and thank you for your service.

Kind regards,

Doug Beecher
La Verkin, Utah