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not limited by the IRS forms.
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To find out more, start with a
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of our flagship products, Tax Preparer® and
Real Estate Analyzer®.
Form 5405 delayed and removed from e-file ... and other casualties of the new tax bills
Although the IRS had made available advance drafts of many forms we support way back in June and July of 2009,
the combination of the November tax bill and a reassessment of the advance drafts has caused delays in the final
release of most credit and recapture forms. Form 5405 (First-Time Homebuyer Credit) has suffered the most extreme changes
in order to handle the expansion and added complexities stemming from the November tax bill (reviewed below), and to
handle the recapture of the credit if the property ceases to be your home too soon after you claim the credit.
As a result, Form 5405 and most other credit and recapture forms were either released very recently are not yet released.
In addition, Form 5405 has been removed by the IRS from their e-file program for the 2010 filing season.
In order to claim the
first-time homebuyer credit (which now applies to much more than first-time homebuyers), you must now file a paper return.
Furthermore, the IRS has announced that it will not start processing any return with a Form 5405 until mid-February.
New tax bill enacted ... with bi-partisan support!
The Worker, Homeownership, and Business Assistance Act of 2009 was signed into law on November 6
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 new 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. It is possible that exceptions may be allowed for
technological limitations or hardship. However, the bill does not state this and
no guidelines have been issued. (With the writing on the wall, we suggest that now is a good time to get started
with e-file so that you won't be caught off-guard in 2011. We offer three levels of e-file, with prices starting at
$45 … $40 before December 1 … with free customer service to help you.)
Tax Preparer and Windows 7
Good News! You can run Tax Preparer on all versions of Windows 7, but some versions may require you
to install additional software.
You can install and run Tax Preparer on all 32-bit versions of Windows 7 with no additional software,
but 64-bit versions require you to install virtualization software on your computer.
The virtualization software allows you to create a window in which you can install 32-bit Windows XP
and run Tax Preparer without affecting your capability to run 32-bit or 64-bit programs under Windows 7.
The virtualization software is FREE. However, if you have a Windows 7 Home edition, you must purchase or
otherwise acquire a legally-licensed
version of 32-bit windows XP (widely available for less than $100).
Better news for Windows 7 Professional, Enterprise, or Ultimate. If you have one of the Windows editions
that are marketed to businesses,
you may be able to install Microsoft's new FREE Windows XP Mode software, which integrates 32-bit
Windows XP into your 64-bit Windows 7 system so that you can put a Tax Preparer icon on your Windows 7 desktop and run
Tax Preparer without even knowing that a virtual machine is involved. But there's a caveat: the new Windows XP Mode
works only on processors that support hardware-assisted virtualization. Although most of the newer processor chips
have this capability, some do not, so you should check Intel's website before you buy.
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.
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.
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:
