October 15th Extension Deadline is near.

Tax Tip

October 15th Extension Deadline Approaching

If you were unable to file your 2013 individual tax return by April 15th and filed an extension, you should be aware that the extension gave you until October 15th to file your return or face a late filing penalty, which is 4½% of the tax due per month, with a maximum penalty of 22½% of the tax due. There is also a minimum penalty of the lesser of $135 or 100% of the tax due. If you prepaid your 2013 taxes timely through a combination or withholding or estimated taxes and will receive a refund when your return is ultimately filed, there is no penalty for filing late.

You should also be aware that the extension provided you additional time to file your return but not additional time to pay any tax you might owe. Thus, even though the extension avoids the late filing penalty, you are still subject to interest on any unpaid balance through the date of filing. Therefore, you can minimize interest charges by filing as soon as possible.

There are no additional extensions available, so if you owe tax it is important you file by the October 15th due date even if you have to estimate the missing items and file an amended return at a later date.

If you are on extension and have the information needed to complete your return, it is important that you provide that information to this office as soon as possible to avoid being caught up in a last-minute rush. If you are on extension and cannot obtain the information required to complete your return, please call this office as soon as possible to discuss your options.

Joseph C Becker
Ten Forty plus Quality Tax Preparation & Financial Services
www.tenfortyplus.com
281-397-7777, Fax 281-397-7443
joeb@tenfortyplus.com

Don't be Fooled by Scammers

Tax Tip

Repeated Warning about Phone Scams

This office has repeatedly warned clients about scams related to taxes. The problem has only gotten worse, so we feel obligated to issue another warning. The scammers out there are pretty sophisticated and are trying to steal your identity and your money. This office doesn’t want you to become a victim, so please read this article and let family and friends know about this rapidly escalating scam based upon individuals’ fears of the Internal Revenue Service (IRS) and their overreaction to calls claiming to be from the IRS. You can even forward this article to your friends and family, and especially be sure to make your elderly family members aware of these scams.

The IRS and the Treasury Inspector General for Tax Administration (TIGTA) continue to hear from taxpayers who have received unsolicited calls from individuals demanding payment while fraudulently claiming to be from the IRS. Based on the 90,000 complaints that TIGTA has received through its telephone hotline, through mid-year, TIGTA has identified approximately 1,100 victims who have lost an estimated $5 million from these scams. We can only imagine how many thousands of taxpayers haven’t reported their losses and encounters with these scammers.

Taxpayers should remember their first contact with the IRS will not be a call from out of the blue, but through official correspondence sent through the mail. A big red flag for these scams is an angry, threatening call from someone who says he or she is from the IRS and urging immediate payment. This is not how the IRS operates. If you receive such a call, you should hang up immediately.

Additionally, it is important for taxpayers to know that the IRS:

•  Never asks for credit card, debit card, or prepaid card information over the telephone.

•  Never insists that taxpayers use a specific payment method to pay tax obligations.

•  Never requests immediate payment over the telephone.

•  Will not take enforcement action immediately following a phone conversation. Taxpayers usually receive prior written notification of IRS enforcement action involving IRS tax liens or levies.

Potential phone scam victims may be told that they owe money that must be paid immediately to the IRS; or, on the flip side, that they are entitled to big refunds. When unsuccessful the first time, sometimes phone scammers call back trying a new strategy. Other characteristics of these scams include:

•  Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.

•  Scammers may be able to recite the last four digits of a victim’s Social Security number. Make sure you do not provide the rest of the number or your birth date…that is information ID thieves can use to make your life miserable.

•  Scammers spoof the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.

•  Scammers sometimes send bogus IRS e-mails to some victims to support their bogus calls.

•  Victims hear background noise of other calls being conducted to mimic a call site.

•  After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

DON’T GET HOODWINKED…it is a scam. If you get a phone call from someone claiming to be from the IRS, DO NOT give the caller any information or money. Instead, you should immediately hang up. Call this office if you are concerned about the validity of the call.

The IRS does not initiate contact with taxpayers by e-mail to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS also does not ask for PINs, passwords, or similar confidential access information for credit card, bank, or other financial accounts. If you receive such a request or communication, DO NOT open any attachments or click on any links contained in the message. If you wish to help the government combat these scams, forward the e-mail to phishing@irs.gov.

This is not the only scam currently making the rounds; you should be aware that there are other, unrelated, scams (such as a lottery sweepstakes) and solicitations (such as debt relief) that fraudulently claim to be from the IRS. When in doubt, please call this office.

Joseph C Becker
Ten Forty plus Quality Tax Preparation & Financial Services
www.tenfortyplus.com
281-397-7777, Fax 281-397-7443
joeb@tenfortyplus.com

Solar Energy may be the way to save energy cost and get a nice tax deduction

ax Tip

How to Cut Your Utility Bills While Reducing Your Taxes

After installing solar or other alternative energy systems in their homes, taxpayers generally benefit from lower utility bills. Taxpayers may also see a lower federal income tax bill for the year of the installation. Through 2016, taxpayers get a 30% tax credit on their federal tax returns for installing certain power-generating systems in their homes. The credit is non-refundable, which means it can only be used to offset a taxpayer’s current tax liability, but any excess can be carried forward to offset tax through 2016.

Systems that qualify for the credit include:

•  Solar water-heating system – Qualifies if used in a dwelling unit that is utilized by the taxpayer as a main or second residence where at least half of the energy used by the property for such purposes comes from the sun. Heating water for swimming pools or hot tubs does not qualify for the credit. The property must be certified for performance by the Solar Rating Certification Corporation or a comparable entity endorsed by the state government where the property is installed.

•  Solar electric system – Qualified system that uses solar energy to generate electricity for use in a dwelling unit (taxpayer’s main or second residence) located in the U.S.

•  Fuel cell plant – This is a fuel cell power plant installed in the taxpayer’s principal residence that converts a fuel into electricity using electrochemical means. It must have an electricity-only generation efficiency of greater than 30% and generate at least 0.5 kilowatt of electricity. The credit is 30% of qualified fuel cell expenditures but limited to $500 for each 0.5 kilowatt of the fuel cell property’s capacity to produce electricity.

•  Qualified small wind energy – A wind turbine used to generate electricity for use in connection with a dwelling unit used as a main or second residence by the taxpayer.

•  Qualified geothermal heat pump – Must use the ground, or ground water, as a thermal energy source to heat the dwelling unit or as a thermal energy sink to cool the dwelling unit, and must meet the Energy Star program requirements that are in effect when the expenditure is made. The dwelling unit must be used as a main or second residence by the taxpayer.

Other aspects of the credit:

•  Limited carryover – The credit is a non-refundable personal credit, which limits the credit to the taxpayer’s tax liability for the year. However, the portion of the credit that is not allowed because of this limitation may be carried to the next tax year and added to the credit allowable for that year. Thus, the credit carryover is available through 2016 (the final year for the credit).

•  Installation costs – Expenditures for labor costs allocable to onsite preparation, assembly, or original installation of property eligible for the credit, as well as for piping or wiring connecting the property to the residence, are expenditures that qualify for the credit.

•  Swimming pool – Expenditures that are for heating a swimming pool or hot tub are not taken into account for purposes of the credit.

•  Newly constructed homes – The credit can be taken for newly constructed homes if the costs of the residential energy-efficient property can be separated from the home construction and the required certification documents are available.

Certification – A taxpayer may rely on a manufacturer’s certification that a product is a Qualified Energy Property. A taxpayer is not required to attach the certification statement to the return on which the credit is claimed. However, taxpayers are required to retain the certification statement as part of their records. The certification statement provided by the manufacturer may be a written copy of the statement that is posted on the manufacturer’s website with the product packaging details in printable form or in any other manner that will permit the taxpayer to retain the certification statement for tax recordkeeping purposes.

If you have questions about how you can benefit from this credit, please give this office a call.

Joseph C Becker
Ten Forty plus Quality Tax Preparation & Financial Services
www.tenfortyplus.com
281-397-7777, Fax 281-397-7443
joeb@tenfortyplus.com