7 FACTS ABOUT THE NONBUSINESS ENERGY PROPERTY CREDIT

The IRS just released a reminder of the energy credits that are available for 2009 and 2010. If you are making some improvements, don’t forget that these credits reduce your tax bill. Let us know if you have any questions.

Seven Facts about the Nonbusiness Energy Property Credit

Taxpayers who take energy saving steps this year may get bigger tax savings next year. The Nonbusiness Energy Property Credit, a tax credit for making energy efficient improvements to homes has been increased as part of the American Recovery and Reinvestment Act of 2009.

Here are seven things the IRS wants you to know about the Nonbusiness Energy Property Credit:

1. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 claimed for 2009 and 2010 combined.

2. The credit applies to improvements such as adding insulation, energy-efficient exterior windows and energy-efficient heating and air conditioning systems.

3. To qualify as "energy efficient" for purposes of this tax credit, products generally must meet higher standards than the standards for the credit that was available in 2007.

4. Manufacturers must certify that their products meet new standards and they must provide a written statement to the taxpayer such as with the packaging of the product or in a printable format on the manufacturers' Website.

5. Qualifying improvements must be placed into service after December 31, 2008, and before January 1, 2011.

6. The improvements must be made to the taxpayer's principal residence located in the United States.

7. To claim the credit, attach Form 5695, Residential Energy Credits to either the 2009 or 2010 tax return. Taxpayers must claim the credit on the tax return for the year that the improvements are made.

Homeowners who have been considering some energy efficient home improvements may find these tax credits will get them bigger tax savings next year.

For more information on this and other key tax provisions of the Recovery Act, visit the official IRS Website at IRS.gov/recovery.

QUOTE OF THE WEEK

"I am not young enough
to know everything."
Oscar Wilde

LUCKY NUMBER 13

My son Ben and his wife Halie recently had their first child, Madalyn. She's the bald one on the left sporting the Kopsa Otte t-shirt.

Some of you may know Ben. We are all very proud of his service overseas in Iraq.

The addition of Madalyn brings my grandchild total to Lucky #13. I couldn't be more proud.

Larry Kopsa CPA

HUGE LOSSES THROW PUBLIC PENSION FUNDS INTO CRISIS

Losses of $1 trillion on investments by U.S. state and local pension funds covering police officers, teachers and other government employees are forcing managers of the retirement plans into a difficult choice. They must either try to boost returns by taking on even riskier investments or start cutting benefits. An analysis by PricewaterhouseCoopers concludes that within an average of 15 years, public pension funds will have less than half of the money needed to pay promised benefits. The Washington Post

COMPETITION FOR JOBS IS TOUGHER THAN EVER

There is an average of about 6.3 unemployed workers for every job opening, a Labor Department report indicates. There is a "jobs gap" of 10 million that needs to be filled just to keep up with population growth, economists said. "Fewer people are facing job loss, but once you have lost your job, you are in serious trouble," said Heidi Shierholz, an economist at the Economic Policy Institute in Washington. TIME/The Associated Press

NEWS FROM THE NATIONAL TAX CONFERENCE IN WASHINGTON

I just returned from the National Tax Conference in Washington D.C. It was a great conference in that the speakers are inside the belt-way and can give us some indication of what they think might be happening in 2010.

A lot of the talk was on the possibility of tax increases and the impact that tax increases would have on the upcoming 2010 elections. No currently seated congress person wants to go home and say, “vote for me” but at the same time having voted for a tax increase. That being said, the consensus was that the politicians will just let President Bush’s tax reductions expire at the end of 2010. By doing this they can say that they did not vote for a tax increase. I’m having a little trouble understanding the logic because it seems if taxes go up it would be an increase, but apparently the politicians can put some kind of spin on this.

There was a lot of talk about health care reform. There were three bills in the House and two bills in the Senate and they were trying to narrow these down to one bill that everyone could vote on. Since I returned back to the office, Harry Reid, majority leader of the Senate, has decided on the bill that he wants to bring forward. It’s amazing the cost of this whole thing. According to the congregational budget office, the total cost would be $1 trillion $55 billion dollars. The House bill is at about $894 billion dollars. It does look like the IRS is going to be more aggressive with 1099’s and 1099 matching. They are looking under every rock to try to find money to reduce the deficit.

More on the session in future issues.

QUOTE OF THE WEEK

"There is no such thing as a
great talent without
great will power."

Honoré de Balzac