IRS Will Begin Accepting 2013 Personal Income Tax Returns on January 31

The IRS has announced the following dates they will begin processing 2013 income tax returns:

1040 Series Individual Tax Returns:        January 31, 2014 (please click here for more info)

Entity Tax Returns:                                 January 13, 2014 (please click here for more info)

My suggestion is that you use the time until these dates to organize all your documents and get them to your tax professional so that you are ready to electronically file when the IRS processing date arrives.  You will still get the fastest and best response from the IRS by electronically filing; any paper returns filed will be held until the initial batches of electronically filed returns are processed.

$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.)

Photo credit:  http://www.publicdomainpictures.net/hledej.php?hleda=energy+efficient+home&x=-791&y=-45

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.

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

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: http://commons.wikimedia.org/wiki/File:IRS_building_on_constitution_avenue_in_DC.jpg  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.

#Business #Travel #TaxDeduction #2013Update

Photo credit:  http://www.publicdomainpictures.net/view-image.php?image=31119&picture=city-traveling

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.

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

And Then It Became This Book:
http://www.amazon.com/How-Will-Measure-Your-Life/dp/0062102419

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