Paul Jones | Utah CPA

If you are a US citizen that is working in a foreign country or earning income in a foreign country, there are very specific rules and regulations concerning the US taxation of that income. We prepare tax returns and give tax advice for expatriates and for foreign source income issues. If you would like to discuss your specific situation click here to contact Paul.

Legislative changes in November 2009 expanded and extended the first-time homebuyer credit and also added documentation requirements for claiming the credit. The IRS is increasing its compliance checks. This means that documentation is now particularly important in claiming the credit. Improper documentation could result in a denial of the credit or an increased wait time for a refund. The Worker, Homeownership and Business Assistance Act of 2009, signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts. Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return. The new law also authorizes the credit for long-time homeowners buying a new principal residence and raises the income limitations for homeowners claiming the credit. Homebuyers who purchased a home in 2008, 2009 or 2010 may be able to take advantage of the first-time homebuyer credit. The credit applies only to homes used as a taxpayer’s principal residence. The credit reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar. The credit is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed. To qualify as a “long-time homebuyer” you must have owned and used the same home as your principal residence for at least five consecutive years of the eight-year period ending on the date you by your new principal residence. For an eligible taxpayer who, for example, bought a home on Nov. 30, 2009, the eight-year period would run from Dec. 1, 2001, through Nov. 30, 2009. If you would like more information specific to your circumstances, click here to contact Paul.

Click here to download your free 2009 income tax organizer.  Use this organizer to gather your information to prepare your tax return. If you would like to have Paul W. Jones, CPA prepare your tax return, this is a great place to start. Click here to contact Paul.

It is very common when selling or buying a business that only the assets of the business are sold or purchased. Both the buyer and seller of the business assets must report to the IRS the allocation of the value paid for those assets among section 197 intangibles (like goodwill, customer lists, etc.) and the other tangible types of business assets (property, equipment, inventory, accounts receivable, etc.). The IRS reporting is handled on Form 8594, Asset Acquisition Statement Under Section 1060. Form 8594 is attached to both the buyer and seller’s tax return in the year in which the asset sale/purchase occurred. Ensuring the that Form 8594 is properly filled out is important. Click here to contact Paul to assist you with preparation of this form or for other tax help in buying or selling your business.

First-time homebuyers may be able to take advantage of a tax credit for homes purchased in 2008 or 2009. The credit:

• Applies to purchases that close after April 8, 2008, and before Dec. 1, 2009.
• You can qualify for the credit if you (and your spouse, if married) have not owned a home in the three years prior to a purchase.
• Applies only to homes used as a taxpayer’s principal residence.
• Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
• Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

The credit is claimed using Form 5405.

To learn how more about the credit or to have Paul amend your 2008 return to claim the credit now (even if you purchased in 2009)–click here and contact Paul.

Click here to download your free 2008 income tax organizer.  Use this organizer to gather your information to prepare your tax return. If you would like to have Paul W. Jones, CPA prepare your tax return, this is a great place to start. Click here to contact Paul.

An often over looked tax benefit is retirement plans. There are a lot of options when it comes to selecting a retirement plan for a business. However, because of complicated tax rules, those options can also be somewhat limited when business are organized as S corporations, LLCs taxed as partnerships, and sole proprietorships with employees. Contact Paul to discuss your options and to learn how a retirement plan can benefit your business. Click here to contact Paul.

Effective January 1, 2009, the annual gift tax exclusion will increase from $12,000 to $13,000. That amount doubles to $26,000 if the spouse joins in the gift. To discuss gifting and gift tax contact Paul by clicking here.

Sales tax is one of the most confusing and frustrating taxes for business owners. For example, in Utah A person who sells items of tangible personal property to the final consumer must collect sales tax on the sale. The sale of property that has been converted to real property is not subject to sales tax. The person who converted the property to real property is required to pay tax on their purchase of the material. This is just one example of the confusing rules associated with sales tax. If you or your company needs advise related to your sales tax issues, feel free to contact me to talk more about it.