More Than Accounting

Archive for December, 2007

1099, 1098… Blast off into 2008!

Posted by Rhonda Spaulding on December 30, 2007

Here we are ready to ring in the new year. The year 2008 should bring lots of excitement including a crazy presidential election. However, before we get to all of that we must file and deal with what the IRS calls “Information Returns”. Let’s just review some of the more common forms and what you might need to know as we enter the tax season.

Form 1098 – You will receive one of these if you paid mortgage interest during 2007. When filing your tax return, remember to deduct any mortgage insurance premiums (PMI) for any home you bought or refinanced in 2007. These premiums are only required on the 1098 if more than $600, but are still deductible in 2007.

Form 1098-E – You will receive one of these for any student loan interest you paid in excess of $600.

Form 1099-B – Brokers use this form to report sales of stocks, bonds, etc.

Form 1099-DIV – Corporations primarily issue these forms for each person to whom they paid $10 or more in distributions including dividends, capital gains, or nontaxable distributions on stock. S-Corporation shareholders will receive this form for any distributions made during the year out of accumulated earnings and profits.

Form 1099-G – You should get one of these if you received $10 or more from a government entity. Some common examples include tax refunds and unemployment benefits.

Form 1099-R – This form is used to report distributions of $10 or more from retirement or profit-sharing plans, IRAs, SEPs, annuities or insurance contracts.

Form 1099-MISC – If you own or run a business, you will need to file this form for each person you paid at least $10 in gross royalty payments, or $600 for rents or services in the course of a trade or business.

Form W-2 – Your employer will file this form for each employee. Employers use this form to report wages, tips and other compensation as well as withholdings for income taxes.

You should expect to receive your forms before or around January 31. The forms are due to the IRS by the end of February. W-2 forms are also due to the Social Security Administration by February 29, 2008 (Happy Leap Year)!

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Congressional tax changes in 2007

Posted by Rhonda Spaulding on December 30, 2007

Well, Congress has been busy doing.. well.. nothing much. They did finally pass a patch that will keep 200,000 Hoosiers from being hit with the Alternative Minimum Tax this year. The last minute change will cause filing delays or refund delays for some but only those who are claiming any of the following credits.

  • Form 8863, Education Credits.
  • Form 5695, Residential Energy Credits.
  • Form 1040A’s Schedule 2, Child and Dependent Care Expenses for For 1040A Filers.
  • Form 8396, Mortgage Interest Credit.
  • Form 8859, District of Columbia First-Time Homebuyer Credit.

If you file the AMT form, you can still file electronically starting January 14. Those claiming the previous credits should be able to send completed returns to the IRS by February 11. Taxpayers who are unsure if they are impacted by the AMT should seek the advice of their tax preparer.

Finally, here is the Indianapolis Star’s summary of what Congress did and did not do in 2007 for Hoosier’s. I could add my own commentary, but I will save that for another day!

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