WHERE IS MY REFUND?

I filed my tax return some time ago and was supposed to get a refund but I have not received it. Can I call the IRS to find out what is happening? How do I call?

Renee

Renee, you do not even need to call. Simply go out to the IRS website, fill out a couple of questions and they will give you the status of your refund. Here is a hot link. Let me know if you have any problems.

Larry Kopsa CPA

Check on Your Refund

SMALL BUSINESSES ARE THE LATEST TARGET FOR CYBERCRIMINALS

Small-business bank accounts increasingly are being targeted by cybercriminals. The criminals use sophisticated programs to gain access to bank accounts through online portals, then add payees to the company's accounts. Shawn Henry, assistant director of the Cyber Division at the Federal Bureau of Investigation, said losses have amounted to hundreds of millions of dollars in the last year or so. The Wall Street Journal

CREDIT FOR HOUSE PURCHASE

I just ran across your website and blog. Thanks for all the information. Maybe you can answer a question for me and my husband. We have owned a house and are looking at purchasing a different home. Do we or don’t we get money from Obama? Thanks in advance.

Yvonne

Yvonne, thanks for the kind words. Unfortunately, with the information that you gave me I can’t specifically answer your question. There have been three different housing credits. Here is some information that may help.

You must buy – or enter into a binding contract to buy – a principal residence located in the United States on or before April 30, 2010. If you enter into a binding contract by April 30, 2010, you must close on the home on or before June 30, 2010.

What is kind of confusing is that there are now two different classifications; First Time Homebuyer and secondly, Long Time Resident Homebuyer.

To be considered a first-time homebuyer, you and your spouse must not have jointly or separately owned another principal residence during the three years prior to the date of purchase. The maximum credit for a first-time homebuyer is $8,000.

To be considered a long-time resident homebuyer you and your spouse must have lived in the same principal residence for any consecutive five-year period during the eight-year period that ended on the date the new home is purchased. Additionally, your settlement date must be after November 6, 2009. The maximum credit for a long-time resident homebuyer is $6,500.

There are some new reporting requirements. You must file a paper return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit with additional documents to verify the purchase. Therefore, if you claim the credit you will not be able to file electronically. In addition, since the IRS supposedly approved over 79,000 incorrect credits, even giving $8,000 to a 4-year old, supposedly they are now checking the requests closer which could slow down your refund.

In addition, new homebuyers must attach a copy of a properly executed settlement statement used to complete such purchase. Buyers of a newly constructed home, where a settlement statement is not available, must attach a copy of the dated certificate of occupancy. Mobile home purchasers who are unable to get a settlement statement must attach a copy of the retail sales contract.

If you are a long-time resident claiming the credit, the IRS recommends that you also attach any documentation covering the five-consecutive-year period, including Form 1098, Mortgage Interest Statement or substitute mortgage interest statements, property tax records or homeowner’s insurance records.

I hope that this helps.

Larry Kopsa CPA

NEW VEHICLE SALES TAX DEDUCTION

The IRS just released a tax reminder for people that purchased a new vehicle between February 16, 2009 and December 31, 2009. I thought it might be of interest.

Eight Facts about the New Vehicle Sales and Excise Tax Deduction

If you bought a new vehicle in 2009, you may be entitled to a special tax deduction for the sales and excise taxes on your purchase.

Here are eight important facts the Internal Revenue Service wants you to know about this deduction:

1. State and local sales and excise taxes paid on up to $49,500 of the purchase price of each qualifying vehicle are deductible.

2. Qualified motor vehicles generally include new cars, light trucks, motor homes and motorcycles.

3. To qualify for the deduction, the new cars, light trucks and motorcycles must weigh 8,500 pounds or less. New motor homes are not subject to the weight limit.

4. Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010.

5. Purchases made in states without a sales tax — such as Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon — may also qualify for the deduction. Taxpayers in these states may be entitled to deduct other qualifying fees or taxes imposed by the state or local government. The fees or taxes that qualify must be assessed on the purchase of the vehicle and must be based on the vehicle’s sales price or as a per unit fee.

6. This deduction can be taken regardless of whether the buyers itemize their deductions or choose the standard deduction. Taxpayers who do not itemize will add this additional amount to the standard deduction on their 2009 tax return.

7. The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

8. Taxpayers who do not itemize must complete Schedule L, Standard Deduction for Certain Filers to claim the deduction.

For more information about these rules and other eligibility requirements visit www.IRS.gov/recovery.

NEW CREDIT-CARD RULES OFFER CONSUMERS NEW PITFALLS

New credit-card rules that went into effect in February are aimed at improving disclosure for consumers, but there are some potential pitfalls. The new law could result in card issuers implementing higher fees to compensate for interest-rate caps, and it could become tougher for consumers to get a new credit card. The new law also is likely to curb the number of rewards offered by companies, this article says. CNN Money had a really good summary of how this new legislation may impact you. CNNMoney.com

EDITORIAL: 'U.S. CREDIT RATING COULD BE DOWNGRADED AS DEBT-TO-GDP RATIO NEARS 70%'

(Wall Street Journal) -- In an editorial at WSJ.com, the editorial staff at The Wall Street Journal reports that "fear of defaults by European countries sent stocks reeling" last week. And while some believe "that could never happen in the U.S.," Moody's Investors Service "caused a market stir" when it said "that on Washington's present spending and debt track, maybe it could" -- and that Moody's could downgrade America's government bond rating. According to the WSJ editorial, the ratio of U.S. federal public debt to GDP "fell in the 1990s as the economy grew rapidly and the post-1994 Republican Congress restrained spending for a time and struck a balanced budget deal with Bill Clinton." The editorial notes that in 2007, the debt ratio had soared to a concerning 36.2%, but "now the public debt ratio is climbing even faster amid slow economic growth and a spending binge, reaching an expected 63.6% this year, 68.6% next year and above 70% later this decade even by White House reckoning." Moreover, "these White House estimates are surely understated if current U.S. policies continue," the Journal opines. The editorial goes on to blast the "$2 trillion in tax hikes that Mr. Obama proposed" in his budget, saying "they will strike an economy still emerging from a deep recession." Read it at http://online.wsj.com/article/SB20001424052748704259304575043600254910186.html>

QUOTE OF THE WEEK

"Little minds are tamed and

subdued by misfortune; but

great minds rise above them."
--Washington Irving