|News You Can Use|
We are excited to support Kalejta Financial Management, P.C. in the
2010 Walk Now for Autism Philadelphia walk this year! The Walk will be at
Citizens Bank Park in Philadelphia on October 2nd and we are all joining to
support the team "Ethan's Allies." Autism touches many
families, and every bit of support increases the hope for a
To learn more or make a donation, visit the team page by clicking here.
We thank you in advance for your support toward this cause!
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year-round, visit our blog, where we provide
regular updates about tax law changes and even obscure credits that can
help save you money.|
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This month, we're bringing you important tax updates for homebuyers, business owners, and individuals. As always, email us if you have any questions!
|Homebuyer Assistance & Improvement Act of 2010|
July 2nd, President Obama signed the Homebuyer Assistance and Improvement
Act. This bill extended the closing deadline for new home purchases, giving
qualifying taxpayers who entered into a binding contract before May 1st for the
purchase of a new home until September 30th
to close on the home and
qualify for the first-time homebuyer credit. The previous deadline was June 30th. This is good news for those of you who were cutting it close!
extension only applies to people who
had ratified contracts in place as of
April 30th that have not yet closed. It does not create a new tax credit; it simply extends the deadline by 3 months
so more people can receive the $8,000 tax credit for first-time homebuyers and the $6,500
tax credit for second-time buyers.
newly purchased home must be used as a primary residence. Other restrictions
The new legislation makes the extension of the credit retro-active. However, some buyers could face unexpected complications, according to industry
That is because contingency clauses in purchase contracts and the expiration of
interest rate locks were based on the June 30th expiration date for the tax
credit, and the closing of many properties may be more complicated even though
the credit will be extended.
The National Association of Realtors estimates
as many as 180,000 homebuyers
under contract by April 30th missed the closing
17,700 in California, 15,340 in
Texas, 14,830 in Florida, and 9,130 in New York.
Many of the transactions involve short sales,
which require the lender to agree
to take a loss on the seller's mortgage, and generally take much longer to
close than standard sales. Currently, as many as 15 percent of distressed property
sales are short sales.
|The Tax Credit That Punishes...|
The Making Work Pay
tax credit caused some nasty surprises
for taxpayers who ended up with a withholding shortfall due to the credit
last year and will again in 2010.
Some people who are married or have multiple jobs found themselves coming up
short for the first time ever due to the withholding tables adjustment required
for that tax credit -- and taxpayers are likely to experience this problem
again this year, according to the good folks at the IRS Stakeholder meeting in
Los Angeles recently. Further, tax rates will be rising, which may come as a surprise to many next April.
We highly recommend you look at your withholding and begin estimating your
taxes before year-end so adjustments can be made. As always, we're available to help year-round, and also strive to offer valuable resources on our website, such as the 1040 Estimator
|Attention Businesses! |
The IRS might be eliminating coupons for depositing payroll taxes!
has issued proposed regulations eliminating the rules for making federal tax
deposits by paper coupon. The paper coupon system will no longer be maintained
by the Treasury Department after December 31, 2010
. The regulations are
consistent with a Financial Management Service initiative announced in April to
increase the use of electronic transactions between taxpayers and the federal
proposed regulations, REG 153340-09,
generally maintains existing rules for
federal taxes through the Electronic Federal Tax
If you are still filing with paper coupons, we will gladly help you get set
up through EFTPS. Email us
if you'd like to start the process!
|Notes on the End of the Bush-Era Tax Cuts...|
The plan to let
Bush-era tax cuts for the highest-income Americans expire would
have limited effect on 76 percent of those taxpayers, a study
Under the Democrats' plan to end a tax break for those
earning more than $200,000 per individual or $250,000 per
couple, the 3.8 million filers who fall in the $200,000 to
$500,000 income range would pay $2 billion more in 2011 taxes,
or an average of $532
, according to a July 30 letter from the
nonpartisan congressional Joint Committee on Taxation.
The study conducted for the House Ways and Means Committee shows that those earning between $200,000 and $500,000 would
account for 5 percent of the planned $38 billion tax increase.
The biggest burden would fall on the 608,000 taxpayers who make
between $500,000 and $1 million and the 315,000 who earn more
than $1 million; the first group would pay $6.5 billion more, or
an average of almost $10,000
, and the second group would owe $31
billion more, or almost $100,000 on average
, the analysis said.
The Joint Committee on Taxation estimated about 161 million
tax returns will be filed in 2011. About 3 percent of those
returns will be from individuals or couples earning more than
$200,000, the committee said.
Unless Congress acts, tax rates of 10, 15, 25,
28, 33 and
35 percent will expire on Dec. 31 and
be replaced with rates of
15, 28, 31, 36, and
. A $1,000 child tax credit will
in half as would other family-related benefits and many
married couples will pay more
. Rates for capital gains will
increase to 20 percent from 15 percent. Dividends, currently
taxed at 15 percent, would be taxed as ordinary income with
rates as high as 39.6 percent. In addition, a top 55 percent tax
on estates worth more than $1 million will be reinstated.
Obama and the Democrats would retain the lower income-tax
rate structures and family subsidies as well as reduced levies
on investment income for those earning less than $250,000. They
also want to extend restraints on the alternative minimum tax, a
parallel system that if left unchecked would nullify the
benefits of the tax cuts for more than 30 million families.
- Maco & Associates
Between our monthly newsletters, be sure to check out our blog
, where we frequently post information about tax-related issues throughout the year.
As always, we're here year-round to help you make sense of the
numbers. Give us a call at
610-489-7215 or send us an email
any time throughout the year. We look forward to hearing from you.