residential energy

Tax

Late-Penalty Relief for Extended Filers

Due to delays at the start of the tax season, the IRS is providing late-payment penalty relief to individuals and businesses requesting a tax-filing extension because they are attaching forms to their returns that couldn’t be filed until after January.

The relief applies to the late-payment penalty, normally 0.5 percent per month, charged on tax payments made after the regular filing deadline. This relief applies to any of the forms delayed until February or March, primarily due to the January enactment of the American Taxpayer Relief Act.

Taxpayers using forms claiming such tax benefits as depreciation deductions and a variety of business credits, including the Work Opportunity Credit qualify for this relief, as well as the following:

  • Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)
  • Form 8908, Energy Efficient Home Credit
  • Form 8839, Qualified Adoption Expenses
  • Form 5695, Residential Energy Credits

Please call us for a complete list of delayed forms.

Individuals and businesses qualify for this relief if they properly request an extension to file their 2012 returns. Eligible taxpayers need not make any special notation on their extension request, but as usual, they must properly estimate their expected tax liability and pay the estimated amount by the original due date of the return.

The return must be filed and payment for any additional amount due must be made by the extended due date. Interest still applies to any tax payment made after the original deadline.

Give us a call if you’re planning on filing a tax extension this year. We’ll make sure you get the late-penalty relief you are entitled to.

Tax

Who Can’t File Until Later?

Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service delayed the opening of tax season this year, but began processing individual income tax returns on January 30.

The delay is due to late tax law changes in the American Taxpayer Relief Act (ATRA) that required the IRS to update forms and instructions, as well as make critical processing system adjustments before it could begin accepting tax returns.

According to the IRS, the vast majority of tax filers–more than 120 million households–were able begin filing tax returns on January 30. The IRS reports that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits. Most of those in this group file more complex tax returns and typically file closer to the April 15 deadline or obtain an extension.

Because the IRS will not process paper tax returns before the anticipated January 30 opening date, there is no advantage to filing on paper before then, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.

Who Can File Starting January 30?

Most taxpayers were able to file starting January 30, regardless of whether they file electronically or on paper, including those who are affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction, and educator expenses deduction.

Several tax forms were affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March; a specific date will be announced in the near future.

The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit).

Please contact us if you need a full listing of the forms that won’t be accepted until later and rest assured, we are working closely with the IRS to minimize delays and ensure as smooth a tax season as possible under the circumstances.

Tax Technology

Residential Energy Tax Credits for 2012

Summer’s here and if you’ve been thinking about “going green” and making your home more energy efficient, then there’s no time like the present, especially if you take advantage of residential energy tax credits still available to homeowners.

The Residential Energy Efficient Property Credit is available to individual taxpayers to help pay for qualified residential alternative energy equipment, such as solar hot water heaters, solar electricity equipment and residential wind turbines. Qualifying equipment must have been installed on or in connection with your home located in the United States.

Geothermal pumps, solar energy systems, and residential wind turbines can be installed in both principal residences and second homes (existing homes and new construction), but not rentals. Fuel cell property qualifies only when it is installed in your principal residence (new construction or existing home). Rentals and second homes do not qualify.

The tax credit is 30% of the cost of the qualified property, with no cap on the amount of credit available, except for fuel cell property.

Generally, labor costs can be included when figuring the credit. Any unused portions of this credit can be carried forward. Not all energy-efficient improvements qualify so be sure you have the manufacturer’s tax credit certification statement, which can usually be found on the manufacturer’s website or with the product packaging.

What’s Included in the Tax Credit?

    • Geothermal Heat Pumps. Must meet the requirements of the ENERGY STAR program that are in effect at the time of the expenditure.

 

    • Small Residential Wind Turbines. Must have a nameplate capacity of no more than 100 kilowatts (kW).

 

    • Solar Water Heaters. At least half of the energy generated by the “qualifying property” must come from the sun. The system must be certified by the Solar Rating and Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed. The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling. Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.

 

 

    • Solar Panels (Photovoltaic Systems). Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.

 

    • Fuel Cell (Residential Fuel Cell and Microturbine System.) Efficiency of at least 30% and must have a capacity of at least 0.5 kW.

 

We’re happy to help you sort out the tax credits available for your “green” home improvements this summer. Give us a call or email us today!

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