Tax Break for Chinese Drywall

Ahhhhhh. The sweet smell of sulfur in the air. Nothing could be more corrosive! Thousands of taxpayers are still dealing with the horrible mess of corrosive drywall~otherwise known as, “Chinese Drywall.” The issues began when the appearance of certain imported drywall hit the US marketplace between 2001-2008. Homeowners have reported blackening or corrosion of copper electrical wiring and copper components of household appliances, as well as the presence of sulfur gas odors. In November 2009, the Consumer Product Safety Commission (CPSC) reported that an indoor air study of a sample of 51 homes found a strong association between the problem drywall and levels of hydrogen sulfide in those homes and corrosion of metals in those homes. Many taxpayers have had to move out of their homes because of health reasons due to the heavy sulfuric odor.

There is some good news though~ The IRS is giving a helping hand to those taxpayers who have suffered a loss due to corrosive drywall. The service is allowing those who have paid for repairs to their homes, due to corrosive drywall, to treat these costs as a casualty loss on their tax return. This will at least offer some relief to homeowners who have had this sulfuric headache!

Revenue Procedure 2010-36 provides the following relief:

• Individuals who pay to repair damage to their personal residences or household appliances resulting from corrosive drywall may treat the amount paid as a casualty loss in the year of payment.
• Taxpayers who have already filed their income tax return for the year of payment generally have three years to file an amended return and claim the deduction.The amount of a loss that may be claimed depends on whether the taxpayer has a pending claim for reimbursement (or intends to pursue reimbursement) of the loss through property insurance, litigation or otherwise.
• In cases where a taxpayer does not have a pending claim for reimbursement, the taxpayer may claim as a loss all unreimbursed amounts paid during the taxable year to repair damage to the taxpayer’s personal residence and household appliances resulting from corrosive drywall.
• If a taxpayer does have a pending claim (or intends to pursue reimbursement), a taxpayer may claim a loss for 75 percent of the unreimbursed amount paid during the taxable year to repair damage to the taxpayer’s personal residence and household appliances that resulted from corrosive drywall.

If a taxpayer has received full reimbursement from their insurance company, then they are not eligible for this loss on their tax return.

If you or anyone you know has had this unfortunate experience with Chinese Drywall, please feel free to contact our office at http://www.efileflorida.com for guidance. You can also reach us by email at: info@efileflorida.com.

 

E-File Florida helps individuals and small business owners to lower their tax bills and maximize their tax refunds. We actually enjoy getting to know our clients and have built a solid reputation of delivering excellent personal service while maintaining the highest level of integrity within the tax preparation industry. We welcome the opportunity to make you a Raving Fan!

IRS CIRCULAR 230 Required Notice – IRS regulations require that we inform you as follows: Any Federal tax advice contained in this communication (including any attachments) is not intended to be used and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction as tax related matter(s).

Contact Us:

PH (954) 583-8534

Fax (954) 583-8557

info@efileflorida.com

www.efileflorida.com

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Tax Increases ARE Coming~Unless Congress Takes Action! (Part 7)

Tax Increases ARE Coming~Unless Congress Takes Action! (Part 7) This is my final update on the scheduled tax breaks that are expected to expire by this year’s end unless congress does something to re-instate them. Now that the elections are over with, I’m hopeful that our Congress will take to the task of looking at these expiring tax breaks before they become extinct. These “Sunset Rules” will impact all taxpayers~the rich, middle class and poor. All politics aside, I would suggest that you call your senators and urge them to re-consider enacting all or some of these tax breaks. Not doing so could place a heavier tax burden on the backs of  struggling americans. I think most of us would agree that times are already financially tough enough without taking on a heavier tax bill. I will keep you updated on any changes made in Washington, but for now here are some more changes you can expect if the “Sunset Rules” are allowed to expire: Health Savings Accounts – The penalty for a nonqualified distribution from an HSA has been increased from 10% to 20% and distribution for over-the-counter medication is no longer a qualified distribution. Higher Education Interest Deduction – This deduction will phase-out for joint filing taxpayers beginning at an AGI of $60,000 (down from $120,000 in 2010). The phase-out for an unmarried taxpayer remains the same. In addition, the deduction is limited to interest paid on the first 60 months (was previously unlimited) in which interest payments are required. This will impact higher-income joint filers and taxpayers who have already exceeded the 60-month limitation. Estate Tax – The estate tax, which was eliminated for 2010, returns in 2011 with an exemption of $1 million dollars (down from $3.5 million in 2009), and a maximum tax rate of 55%, up from 45%. On top of all these changes, there are the Health Care provisions that are taking effect in 2013, including the following: increasing the medical deduction floor to 10% for most individuals (up from 7.5%), adding a 3.8% unearned income surtax to high-income taxpayers, and tacking on an additional .9% to the current 1.45% hospitalization insurance (HI) portions of the FICA withholding (or the SE tax in case of self-employed individuals). The surtax and additional HI withholding apply to incomes in excess of $250,000 for married joint filers, $125,000 for married individuals filing separately and $200,000 for others. E-File Florida is very happy to help you with questions regarding these “Sunset Rules”. Feel free to contact our office by calling 954-583-8534 or by email at info@efileflorida.com. You can also visit us on the Internet at http://www.efileflorida.com for more great tax tips and articles. Esther Hastings, EA E-File Florida helps individuals and small business owners to lower their tax bills and maximize their tax refunds. We actually enjoy getting to know our clients and have built a solid reputation of delivering excellent personal service while maintaining the highest level of integrity within the tax preparation industry. We welcome the opportunity to make you a Raving Fan!   IRS CIRCULAR 230 Required Notice – IRS regulations require that we inform you as follows: Any Federal tax advice contained in this communication (including any attachments) is not intended to be used and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction as tax related matter(s).

Contact Us: PH (954) 583-8534 Fax (954) 583-8557 info@efileflorida.com www.efileflorida.com Are you tired of being in DEBT? Click Here.

 

Tax Increases ARE Coming~Unless Congress Takes Action! (Part 6)

Tax Cuts Are Scheduled To Sunset! (Part 6) I wish that I could tell you that this is my last post on the subject, but the truth is that there are still more tax breaks that are scheduled to expire this year unless our congress re-instates them before year’s end. If these “Sunset Rules” are allowed to become extinct, we can ALL expect to pay more in taxes to our federal government~Plain and Simple. Here are some of the changes we can expect if nothing is done: Coverdell Accounts – The contribution limit to Coverdell education savings accounts will be reduced from $2,000 per year to $500, tax-free distributions will no longer be allowed for elementary and secondary education (only post-secondary education), education credits will not be allowed in the same year as a Coverdell distribution, and contributions cannot be made to a Coverdell account and a Sec 529 plan in the same year. Home Energy Improvement Credit – The $1,500 credit for making improvements that increase the energy efficiency of a taxpayer’s home expires after 2010. Hybrid & Lean Burn Credits – Most manufacturers have reached the 60,000 unit maximum after which the credit is reduced or no longer allowed. As a result, this credit will have very limited application in 2011. Making Work Pay Credit – Expires after 2010. This refundable credit of $800 for joint filers and $400 for unmarried individuals phases out for higher-income taxpayers so the loss of the credit impacts middle- to low-income taxpayers. As you can see, these tax credits affect many middle and lower income taxpayers. It’s my hope that congress will act SOON! E-File Florida is very happy to help you with questions regarding these “Sunset Rules”. Feel free to contact our office by calling 954-583-8534 or by email at info@efileflorida.com. You can also visit us on the Internet at http://www.efileflorida.com for more great tax tips and articles. IRS CIRCULAR 230 Required Notice – IRS regulations require that we inform you as follows: Any Federal tax advice contained in this communication (including any attachments) is not intended to be used and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction as tax related matter(s). Esther Hastings, EA E-File Florida helps individuals and small business owners to lower their tax bills and maximize their tax refunds. We actually enjoy getting to know our clients and have built a solid reputation of delivering excellent personal service while maintaining the highest level of integrity within the tax preparation industry. We welcome the opportunity to make you a Raving Fan!

Contact Us: PH (954) 583-8534 Fax (954) 583-8557 info@efileflorida.com www.efileflorida.com Are you tired of being in DEBT? Click Here. (I HIGHLY recommend this “get out of debt” program!)