Jerry Coon

The Tax Attic, April 30, 2009

April 30, 2009 // 0 Comments

Home improvement credits change It’s home improvement time of the year. It was a cold winter and many of us are thinking about adding some insulation wherever possible, replacing a few of those leaky windows, replacing that old leaky slider,  putting in a new insulated exterior door, buying a new high-efficiency furnace, or purchasing high-efficiency appliances. This is a good opportunity to go over the dollars our federal government has available to help with these home improvements. The American Recovery and Reinvestment Act of 2009 (ARRA) signed by President Obama in February greatly expanded the Residential Energy Credit in dollars available. In most instances, ARRA increased the percentage of cost that we are allowed as a credit in addition to also increasing the maximum amount of dollars that we are allowed. ARRA also further defined what products actually do qualify for the credits. Many of the products that qualified for a credit in 2007 will not qualify for the credit in 2009 because they won’t be considered high-efficient enough. The credit has been increased, but the qualifying standards have also been raised. For reference purposes, for most purchases, there was no Residential Energy Credit in 2008. That year was skipped, so if you did some updating in 2008, you may be painfully aware that there was no credit for those purchases. I think it is fair to say the federal government once again wants us to spend money on energy-saving home improvements. For example, ARRA increased the maximum credit for installing qualifying windows to 30% of the cost up to a maximum of $1,500 credit. It’s important to note that this credit is nonrefundable. In other words, the taxpayer must have a tax liability in order to benefit from the credit-no tax, no credit. Under the old rules, only 10% of the cost qualified and the maximum credit allowed for windows was $200. In addition to the $200 limit, there was also a $500 lifetime maximum for all improvements. This was replaced totally by the 30% of cost figure and the $1,500 maximum credit. Perhaps that is one reason every other advertisement we seem to see on TV is Jack’s Windows or Wall Side Windows. Other types of purchases also had small limits. Advanced main […]

The Tax Attic-April 23, 2009

April 23, 2009 // 0 Comments

Continuing health insurance   We are all creatures of habit. For me, the day after the end of tax season, usually April 16, is the perfect example. I always take that day off work. I really enjoy preparing taxes, as do my co-workers, but the pressure is so intense during those last few weeks that a day off is needed to at least partially recharge the batteries, so to speak.   Since Meijer opened on Ten Mile Road several years ago, my first stop of the morning has been there to buy an all-species fishing license. All fishing licenses expire on March 31 and, since I am rather tied up from April 1 through April 15, in order to legally jump in the Rogue River, I need a new license. I was rather pleased to see that 28 dollars bought me that all-species license-the same fee as last year. I thought I had heard the fees were going up by 10 dollars, but the state legislature must have felt sorry for us fishermen and decided to leave the fees the same. After getting that license, I head back home and take stock of what my garage looks like. It can take some straightening up, to say the least. It’s also time to switch recreation pursuits. Since bowling is finished, that must mean it’s time to start golfing. I get out the golf clubs and analyze the equipment in my bag. I’m still holding out hope for a round in the 70s and a hole in one, so I have to figure out what piece of technology is out there that just might allow me to get into the 70s and get that hole in one. It’s also time to think about playing softball. My expectations are substantially lower when it comes to softball. I plan to not pull any muscles this year, not make too many fielding errors-no more than six for the year-and to have an on-base percentage of at least 0.500. With proper stretching before each game, I might not pull any muscles. With a rather loose definition of “not too many” fielding errors, I most likely can meet that goal. Finally, I use the “on-base” percentage of calculating 0.500 instead of straight […]

The Tax Attic

April 15, 2009 // 0 Comments

When is Tax Freedom Day? What a difference a year makes. No, I’m not talking about April 15. That day comes hell or high water, or maybe hell AND high water is the more appropriate way of stating it. I’m talking baseball in general and Detroit Tigers baseball in particular. I’m one of those lifelong Detroit baseball fans who grew up listening to Ernie Harwell and Paul Carey on the radio and watching George Kell and Al Kaline on the television. As a youngster, what a treat it was to get to watch a Tiger game on one of those rare weekday nights when the game was on TV. Today, all of the games are on Fox Sports or ESPN, but back then usually only weekend games were shown on Channel 3. I guess bumping a regular night of programming off the air for a normal regular season baseball game wasn’t all that wise of a choice. Last year, at this time, the Tigers were zero for April. They lost their first seven games. Their bullpen gave away many of those games. I, personally, was stunned. They had more hitting firepower than any other team in baseball. Their starting pitchers were dependable pitchers. The bullpen was stocked with veteran relievers. Granted, they had a few deficiencies in the field. They were going to make some errors, but out-hitting and outscoring the opposition can make up for not catching every ball. Things unraveled quickly last year. Getting off to a 0-7 start has a way of doing that. The dependable starting pitchers either injured their arms or seemed to just forget how to pitch. The relievers couldn’t throw strikes or injured their arms, or didn’t throw strikes and injured their arms. What a disaster. However, it’s a new year, and these Tigers are off to a great start. The fielders actually do catch the ball. The hitters are hitting. Other teams have more and better hitters, but not by much. The starting pitchers are back to being somewhat dependable. Most importantly, the relief pitchers seem to be able to throw strikes, get some people out, and protect a lead in the seventh, eighth and ninth innings. Go, Tigers. Maybe by the time October and the playoffs come […]


April 8, 2009 // 0 Comments

Reasons to file The end of the 2009 tax filing season is coming up quickly. The majority of all tax returns are completed and either mailed in or e-filed. However, there are still several million, perhaps up to 20 million, taxpayers who are going to file an extension. There are actually some very legitimate reasons for filing an extension. One of the most common reasons is a retirement-planning reason. Taxpayers with an SEP retirement plan are allowed to make contributions until they file their return. By filing an extension, it effectively extends the time the taxpayer has to accumulate the money to fund the SEP. That is a huge difference between an SEP and a traditional or Roth IRA. The traditional or Roth IRA must be funded by April 15, whether the return is extended or not. If the money is not in the account on April 15, it’s a contribution that counts for the next year. A second reason to file an extension is the paperwork is just not available to complete the return. Many taxpayers today are invested in limited partnerships. Some of those limited partnerships invest exclusively in other limited partnerships. It’s their special form of diversifying. However, if just one of those other limited partnerships is late in getting their information out, it’s the domino effect, with the net effect that whoever is invested in the original limited partnership has to file an extension. A third reason to file an extension is some particular piece of information is not available for the cost basis of property that was sold such as a stock, mutual fund, or land. In today’s investing environment, many taxpayers have liquidated investments. The brokerage company involved always reports the gross sales price to the Internal Revenue Service. The IRS has one side of the story: the selling price. The part that is left to the taxpayer is to determine and report the cost of the item that was sold. If the taxpayers have purchased everything that was sold through the same brokerage company, usually they are provided with a cost basis statement. However, switching brokerage companies is a fine art today. Every time there is a switch, the new company usually has no idea of the cost […]

Six frequently asked questions answered

March 26, 2009 // 0 Comments

The Community Expo, one of my favorite events of the year, occurred last Saturday at Rockford’s senior high school. This was the fifth annual expo as sponsored by the Chamber of Commerce. We have Carl Shook, past executive director of the Chamber, to thank for our expo. Six or seven years ago, he first proposed holding a community expo. In light of the Chamber’s mission to promote area businesses, it seemed like a perfect fit. Carl traveled to other expos being held around the area and initiated the plans to create our own community expo. As so many times happens in Rockford, when we do something, it’s bigger and better. We don’t just duplicate; we improve. The upcoming Relay for Life event is another prime example. Brenda Davis, the current executive director, has kept the ball rolling and keeps adding improvements. I also thank Dr. Shibler for hosting the expo at the high school. I don’t know how many other superintendents around the state would have been on the floor during the event like Dr. Shibler, helping to make sure all is running smoothly, but I bet it’s a small number. It’s hard to come up with a nicer way to promote business than the Community Expo. It is an excellent venue for citizens of the Rockford area to see the varied services and products available to them. During the expo, I was asked many questions. I knew the answer to most of them, but there was one question that really stumped me. Fortunately, I belong to an organization, the National Association of Tax Professionals (NATP), that has 14 full-time research specialists on staff just waiting for tax professionals like me to call them. I have never been disappointed in the past by NATP’s research staff and I won’t be disappointed this time either. Recently, NATP published a list of their top 25 most frequently asked research questions. Six of those happen to be questions that I have asked NATP to provide me with an answer and the documentation to back up that answer. First, can a distribution from a 401(k) be used to pay tuition or other educational expenses for a dependent and avoid the 10 percent premature distribution penalty? The answer is no. […]

1 31 32 33 34 35