The Check (refund) is not in the mail

Americans receiving payments for Social Security, unemployment insurance, veterans benefits, IRS tax refunds, railroad retirement, and government benefits will now find the money automatically deposited into their personal bank accounts. Americans without bank accounts can get paid using the Treasury Department's Direct Express Debit MasterCard program.

Why the shift to direct deposits? Two reasons:

1. it will be easier and faster for consumers to get paid and,
   
2. it will save taxpayers money - an estimated $303 million over the first five years and about $120 million each year after that.
   

For instance, despite repeated attempts to get recipients to convert to electronic payments, the Treasury Department still mails out more than 136 million benefit checks each year. Now, as part of President Obama's effort to eliminate waste and modernize government for taxpayers, that will change.

The Treasury published a notice of proposed rulemaking in the Federal Register to begin a 60-day period of public comment. Once the final rule is published, the administration will roll out the changes with a public education campaign.

The new rule will primarily take effect in March 2011, with a few exceptions that will not take effect until March 2013.

This will propably not effect the 2010 tax season (Jan-April 2011)

Odds & Ends

1. Medicare $250 checks will begin being sent mid-June.
   
2. Starting July 1st the 10% excise tax on indoor tanning services begins. If you pay a separate fee for tanning, either to a business or at part of your Gym you will be subject to the tax. If your Gym offers it as an “included” service there will be no extra tax and as always any medical reasons will not be subject to the tax or the “spray-on” services.
   
3. As of 6/22/10 there will be no extension of the closing date for the First Time Homeowners Credit. You will need to close by June 30th, 2010. You do however, have until April 15th, 2014 to amend or file for the credit.
   
4. Processing Time:
   1040 Paper Return – 12 wks
   1040X (Amended) – 12 wks
   1040 e-file – 3 wks
5. The IRS will either charge or pay 4% interest on underpayments or overpayments.
   
   Need to do a “Mid-Year” tax check up? Give a call, no charge.
   
   Army Post Accounting 515.285.5544

Conversion to ROTH IRA

There are several options on converting a traditional IRA to a ROTH. You can split the tax over two years. Even if you are married and both convert. Check with your tax professional for the best situation for you.


Married Filing Joint filing status, both taxpayers convert their traditional IRA to ROTH. May they make separate elections on how to pay the tax? One spouse would include in income on the joint return the full amount of their conservation and pay all the tax in 2010 and the other spouse would include in income 1/2 of conservation in 2011 and 1/2 of conservation in 2012 and pay the tax in 2011 and 2012.

Updates to come.