Another year flew by! …and what a year, especially for Roundup and Musselshell County residents. Many tax issues are still un-decided in Congress! Below are some changes and issues I would like to bring to your attention. You can be sure that I will work more diligently than ever to keep your tax bill at the lowest legal amount.

If you (and spouse if married) made or are considering investing in insulation, storm windows or doors, high efficiency furnaces or water heaters or similar energy improvements there is a 10-30% Federal income tax credit available in many cases. The bad news? It is limited to a maximum of $500!

A major revision of college credits by President Obama has provided us with the new “American Opportunity Credit,” a special credit for undergraduate college students. This credit was scheduled to expire at the end of 2010 but has been extended through 2012. If you have children in college or near to college, please discuss some options with me to assure that you receive the best benefit for these costs.

Recent IRS scrutiny of home mortgage interest deductions now requires me to carefully track re-financings and the use of loan proceeds. Please provide me with any new home loan information, closing statements from any re-financings, and a summary of the use of any additional loan proceeds.

A scary IRS court case in 2008 reminded us again of the rules on charitable contributions. ALL deductions of any amount must have a receipt. Any individual contribution over $250 must also have an acknowledgment letter from the charity, and the letter must be dated by the date we file your return. The letter should show the date and amount of any individual contribution over $250, and should also state that no goods or services were received in return for the contribution.

If you have read any news in the last year you know that the IRS is looking closely for offshore accounts. If you have an account, rental property, or business interest with a value over $10,000 in a foreign country, or a foreign business ownership (not through a mutual fund) please let us know as some special rules will apply to you. There are substantial penalties for failure to disclose these items.

If you own rental property, this year the IRS has demanded substantially more information. We now need, FOR EACH PROPERTY SPERATELY, the physical location, the type of property (single-family, duplex, etc), and Forms 1099-K received, and a record, by property of the number of days rented and the number of days used for personal purposes.

I would like to point out the following three provisions to business owners:

1. The limit for expensing capital expenditures is still $500,000.
2. 100% Bonus Depreciation for 2011, but this rate will drop to 50% in 2012.
3. Cell phone record-keeping rules have been eased for employer-provided cell phones.
4. Retention Credit for any eligible employee retained who qualified for the New Hire Credit last year.
5. The Standard Mileage Rate changed in the middle of the year from 0.51 cents per mile to 0.555 cents per mile.  

With record Federal deficits predicted for the next 10 years, it is a possibility that future tax rates will be substantially higher than today. If you are considering selling property or stock, there is a good chance that 2011 will have the lowest capital gains rates any of us will ever see again, and the 2011 rates continue to be the lowest rates since before World War II.

Credit Card Companies are now required to issue a Form 1099-K to businesses that receive payments from their customers by credit card. Be sure to include this form with your tax documents.