Last major tax bill enacted with bi-partisan support!

The Worker, Homeownership, and Business Assistance Act of 2009 was signed into law on November 6, 2009 after quick and decisive bi-partisan support ... 98-0 in the Senate and 403-12 in the House. Although the bill contains 18 sections, only a few are of particular interest to individual taxpayers, including:

• First-time Homebuyer Credit extended and expanded. The credit had been set to expire on November 30, 2009, but has now been sweetened by several provisions:
  • The credit is now extended to purchases through April 30, 2010, with the ability to claim qualifying 2010 purchases on tax returns for 2009.
  • The credit is extended to April 30, 2011 for individuals on extended overseas duty, including uniformed service, U.S. Foreign Service, and work in the intelligence community.
  • Recapture of the credit (for those who purchased a new home prior to 2009) is waived for individuals on extended overseas duty.
  • The income level at which the phaseout of the $8,000 credit starts has been raised from $150,000 to $225,000 for joint filers, and from $75,000 to $125,000 for everyone else. (The credit is fully phased out at a level $20,000 higher.)
  • The credit now includes a $6,500 credit for long-time homeoweners who resided in the same main home for at least five years and purchased a new home after November 6, 2009 but before May 1, 2010. With this addition, the title of the credit is now only symbolic!
• Net operating loss (NOL) carrybacks extended. NOL is normally carried back no more than 2 years and forward up to 20 years, but a temporary provision allowed small businesses to carry back their 2008 NOL up to 5 years. The new law extends the temporary benefit to ALL businesses and allows the business to choose to apply the provision to either their 2008 NOL or their 2009 NOL. However, the carryback to the fifth prior year (and only that year) can offset no more than 50% of that year's taxable income. (The 50% rule is waived for small businesses using the provision for their 2008 NOL.) The new law also suspends the rule that the NOL deduction cannot reduce alternative minimum taxable income (AMTI) by more than 90%.
• Unemployment compensation extended. The new law extends unemployment compensation by as much as 14 weeks in most states, but as much as 20 weeks in designated high unemployment states.

There is also one provision of particular interest to tax professionals:

• Mandatory e-file for paid preparers in 2011! In order to help pay for the benefits of the new bill, mandatory e-file is coming for most paid preparers, which is expected to increase overall e-filing by more than 25%. The bill states that, after December 31, 2010, all paid preparers who expect to prepare 10 or more returns for the year must e-file all of those returns. However, the IRS has recently announced that the 10 return test will be loosened to 100 returns for the 2011 filing season (for tax year 2010 returns). The 10 return test is delayed until the 2012 filing season. In addition, exceptions will be allowed for hardship on the preparer and for clients who don't want their returns e-filed.

Tax Preparer and Windows 7

Fall 2009 HowardNews now on-line:
Year-end tips and expected changes.

Expiring soon ... don't let these benefits slip away! Three important benefits expire in 2009, and one of them on November 30! You must therefore ACT NOW if you want to take advantage of them.

e-file transmission software ... 15% off until October 31. You must have this transmission software to e-file ANY returns with Tax Preparer, but we've extended a 15% discount to the end of October.

Three forms added to Tax Preparer. We're dropping two forms that the IRS has retired, and are adding three new ones. See which ones here.

Significant changes in many forms. Based on advance drafts from the IRS, there are major changes in several forms. See details here.

64-bit Vista requires additional software to run Tax Preparer. If you have purchased a new machine with 64-bit Vista installed, see our tips on how to run Tax Preparer on it in spite of the new incompatibilities introduced by Microsoft.

For details, see the Fall 2009 issue of HowardNews.

Stimulus Bill gives big breaks
to individuals and businesses.

While the popular press publicized the big expenditures for infrastructure, health, education, and energy, the tax portion of the Stimulus Bill (the American Recovery and Reinvestment Tax Act of 2009) is wide-ranging. Signed into law on February 17, 2009, it includes a number of breaks, including a sweetened homebuyer credit for 2009 purchases that can be claimed on 2008 returns, tax-free unemployment compensation, extended depreciation breaks, above-the-line deduction for car purchases, enhanced EIC and education credits, and much more.

For details on this bill and the new importance of amended returns, see the Spring 2009 issue of HowardNews.

Tax Forms and More

We offer three levels for each Tax Preparer software package:

• Premium Level
• Standard Level
• Economy Level

Click a level above for a list of features and forms built-in and fully-automated for that level. And to make sure you're not left behind at the beginning of the tax season, click here to ORDER ON-LINE.

Get Ready for

e-file is included with Standard and Premium Level CD-ROMs, but you must:

• apply to the IRS for your lifetime EFIN (get IRS application form here), and
• annually register with us your bank and transmission choices (click here to learn more).

Except for unusual limitations imposed by the IRS, you can now e-file most returns ... even when the data does not fit on the IRS paper forms!

What's NEW for California?  Click here to find out!

We tell you the latest on mandatory e-file for preparers and the many forms we're adding.