Local tax professional weighs in on tax law changes
“What that means is your filing status, like head of household or single. This is causing some distress to many parents and it is better explained by a tax professional then your cousin or Aunt Martha.”
— Barbara Dunckley, owner of H&R Block in Craig about changes in documentation requirements on tax forms by the IRS
The business owners, farmers, ranchers and landlords of Northwest Colorado may want to think twice about doing their own taxes this year.
Because congress didn’t approve many many items related to the new American Taxpayer Relief Act until Jan. 2, the United States Internal Revenue Service now is behind in getting tax forms completed and released to the public.
Barbara Dunckley, owner of H&R Block in Craig, said one of those forms, form 4562 concerning depreciation, will involve almost anyone who owns a business, corporation, partnership, ranch, farm or has a rental property.
Due to the fact that ranchers and farmers may not even have that form by their usual March 1 deadline, the IRS Tuesday announced the deadline will be extended to April 15.
A second major change made by the IRS this year includes a mandate for more documentation regarding earned income credits and dependency claims.
“What that means is your filing status, like head of household or single,” Dunckley said. “This is causing some distress to many parents and it is better explained by a tax professional then your cousin or Aunt Martha.”
Although the rules have always been in place, the documentation requirement mandates tax professionals ask what can sometimes be personal questions of their clients, and are required to do so because of an IRS due diligence clause.
“I sympathize greatly with the tax payer who has done the same thing for years and years,” Dunckley said. “But all things are subject to change and we want the general public to understand we have been mandated to document all of these questions.”
On the upside, Dunckley said there are three credits Congress decided to extend she’s very happy about.
Congress extended the tuition and fees credit for 2012, the educator credit, which reimburses educators for spending their own money on supplies, and the American Opportunity credit, another college credit which was extended until 2017.
“Those are biggies for blue collar people,” Dunckley said. “Those affect so many people, teachers and students, so that’s a good thing.”
Aside from being in the know and up to date on all the tax law changes, H&R Block offers a unique program to clients to help prepare for President Barack Obama’s healthcare reform set to take place in 2014. Anyone who has their taxes done by H&R block will have their information put into a program that shows how a client will be affected by the health care reform.
“They’re going to assess that right there on your form in 2014, and there will be penalties for those uninsured,” Dunckley said. “So we’re able to give them a heads up and help start their planning for 2014.”
Dunckley said she can tell a client approximately what their penalty will be if they are uninsured, what it will cost if they do get insurance and also if they qualify for a federal subsidy.
“This is specially built into our tax program. That is an important one that’s going to affect everyone,” Dunckley said.
With the IRS not accepting filings until January 30, many people might not see the need for urgency in preparing their taxes.
But Dunckley said many clients have already booked appointments in February, quickly filling the month.
Even for those getting their taxes done right away, Dunckley said they probably won’t get returns for 21-30 days after acceptance, and that’s the best-case scenario.
“You have to remember that it’s the whole U.S. that can’t file until the 30th so they’re going to be bombarded,” she said.
With more than 800 changes to the tax laws, Dunckley said she encouraged residents to come see a tax professional rather than attempt to do it themselves.
“If they’re willing to dig and do their homework, (they might) find out all these 800 changes,” Dunckley said. “But if they don’t feel like digging. We’ve dug. Come see us.”
Darian Warden can be reached at 875-1793 or email@example.com