This Season’s Tax Tips
Claiming a 2005 Refund
You’ve probably already heard, but if gone unclaimed by April 15th of this year, 1.3 million dollars worth of 2005 tax refunds will become the property of the US Treasury. The IRS provides a three-year window for individuals to claim refunds on taxes withheld from their wages, and this year is the deadline for unfiled 2005 returns.
The IRS estimates that half of those taxpayers with unclaimed refunds would likely receive more than $581 if they meet the aforementioned deadline. Most of these individuals probably didn’t file because they believed they had too little income to claim a refund.
If you have a client who hasn’t yet filed a 2005 return, remind them that they will not receive their refunds until they have also filed a 2006 and 2007 return.
For more information, visit the IRS website.
Help Clients Claim COBRA Medical Coverage Credit
The IRS released new information intended to help employers claim COBRA medical coverage credit for premiums they pay for former employees. Taxpayers can use Form 941, Employer’s Quarterly Federal Tax Return, to claim COBRA premium assistance payments credit, starting with the first quarter of 2009.
IRS Commissioner Doug Shulman explains, “This is the first step in our effort to provide employers with information on this important benefit for people who have lost their jobs.”
In order to claim this credit, employers must have proper documentation, which is all detailed on the IRS’s website with this new information.
For more information, visit the IRS.gov.
Tax Break for First-Time Homebuyers
First-time homebuyers who purchase before December 1st of this year can claim this tax credit in either this year’s return, if filed before April 15th, or on their 2009 return. These taxpayers could receive as much as $8000, if married filing jointly, or $4,000, if married filing separately.
“For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman. Qualifying homebuyers will not have to pay this credit back.
Form 5405, First-Time Homebuyer Credit, has been revised accordingly and posted on IRS.gov. For more information, visit their website.
Reporting Cash Payments over $10,000
In their e-Newsletter for small businesses, the IRS issued a reminder that businesses are generally required to file Form 8300, Report of Cash Payments over $10,000 Received in a Trade or Business, when receiving more than $10,000 from a customer in a single business transaction or two or more related transactions. For more information on this requirement, visit the corresponding IRS website.
Publication 583: A Good Resource for Your Small Business Clients
It’s important that your small business clients maintain good records. In order to encourage them to do so, consider giving them access to Publication 583, Starting a Business and Keeping Records. The IRS has provided an online copy and a PDF for printing.
UAC’s Free Tax Resources
If you’re interested in accessing more tax resources, visit our website for free tax articles, a tax glossary, access to our tax forum, and convenient links to IRS tax forms.
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