Energy-Saving Steps This Year May Result in Tax Savings Next Year
The recently enacted American Recovery and Reinvestment Act (ARRA) of 2009 contained a number of either new or expanded tax benefits on expenditures to reduce energy use or create new energy sources. The IRS encouraged individuals and businesses to explore whether they are eligible for any of the new energy tax provisions. Homeowners can get bigger tax credits for making energy efficiency improvements or installing alternative energy equipment. ARRA provides for a uniform credit of 30 percent of the cost of qualifying improvements up to $1,500, such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems. Business taxpayers who place in service facilities that produce electricity from wind and some other renewable resources can choose one of three options to fund the project: a tax credit based on the amount invested, a tax credit based on the energy produced or a grant. More information on the wide range of energy items is available on the special Recovery section of IRS.gov.
Tax Breaks Available for Taxpayers Who Purchase Qualified Plug-In Electric Vehicles
Plug-in electric vehicles using certain types of batteries may qualify for a new tax credit if purchased this year. The Emergency Economic Stabilization Act of 2008 (EESA) and the American Recovery and Reinvestment Act of 2009 (ARRA) created two new tax credits for various types of electric vehicles, which may include what are commonly referred to as neighborhood electric vehicles. See the full article for details.
IRS Announces Withholding Adjustment Option for Pension Plans and Provides Taxpayer Education
As part of a wider outreach effort to educate taxpayers about the benefits they will receive under the American Recovery and Reinvestment Act, the Internal Revenue Service today released new withholding adjustment procedures for pension plans. In February, the IRS issued revised withholding tables incorporating the Making Work Pay Tax Credit, one of the key provisions of the American Recovery and Reinvestment Act. That change resulted in more take home pay for more than 120 million American households and provided an immediate economic stimulus. The new procedure for pensions will make withholding more accurate for pension recipients. While the newly announced procedures apply only to pension payments, the IRS is gearing up for a wider outreach campaign to educate pensioners and other taxpayers about the withholding tables and Recovery payments.
Primary web page for updates to Tax Provisions in the American Recovery and Reinvestment Act of 2009
New Identity Theft Affidavit
IRS has a new Identity Theft Affidavit - Form 14039
, that taxpayers and IRS employees can use to document actual or suspected tax-related identity theft. If you believe your identity has been stolen, you can use this form to help minimize or prevent the effect of identity theft to your tax account. Prior to the release of Form 14039, the IRS accepted the Federal Trade Commission affidavit. The IRS is now accepting Form 14039 and the police report required to substantiate identity theft occurred. The IRS’ new form requests limited personal information and does not require a waiver for disclosure of included information. To ensure a smooth transition, IRS will continue to accept the FTC affidavit for the next six months.
Beware of IRS’ 2009 “Dirty Dozen” Tax Scams
The Internal Revenue Service today issued its 2009 “dirty dozen” list of tax scams, including schemes involving phishing, hiding income offshore and false claims for refunds. “Taxpayers should be wary of scams to avoid paying taxes that seem too good to be true, especially during these challenging economic times,” IRS Commissioner Doug Shulman said. “There is no secret trick that can eliminate a person’s tax obligations. People should be wary of anyone peddling any of these scams.”
E-file Hits Record 90 Million; 30 Million Filed from Home Computers
A record 90 million tax returns were filed electronically this year, led by a big increase in people using home computers. For the first time, more than 30 million individual income tax returns were filed from home computers, an increase of more than 19% from the same time last year. A higher percentage of the population is choosing to e-file this year. As of April 24, almost 70 percent of individuals chose to e-file their tax returns, compared to 61 percent for the same time last year. The IRS will continue to accept income tax returns through IRS e-file and Free File until Oct. 15. IRS e-file is popular because it’s fast, safe and accurate. An electronically prepared and filed return has an error rate of less than 1 percent, compared to an error rate of about 20 percent for a paper prepared return. People can receive a refund in as little as 10 days if they use electronic filing and direct deposit. Also, people who owe can also pay electronically by debiting their financial account or using a credit card.