Tax season is here, but those who have tried to file early may have been unsuccessful because of Congress’s last-minute “fiscal cliff” deal.
The Internal Revenue Service has been updating different tax forms, such as tax credits that were extended under the negotiations, every week. It announced Tuesday that all forms are up-to-date, and it is now accepting all tax returns – just in time for the March 15 deadline for businesses and April 15 deadline for individuals.
Accountants say businesses and individuals shouldn’t be looking for new tax breaks but instead look at which ones still apply.
One of the biggest extensions Congress passed in the American Taxpayer Relief Act of 2012 is the Section 179 depreciation deduction. It allows small businesses to deduct 100 percent of qualifying property, such as new equipment or computers, in one year. The maximum deduction is $500,000 for 2012 and 2013.
To qualify, businesses have to have less than $2 million in total capital expenditures.
Congress also created a permanent Alternative Minimum Tax patch. The AMT was established in 1969 to ensure high-income Americans paid income tax, but the threshold was never indexed for inflation and could have affected millions of Americans it was never intended to if lawmakers didn’t pass a patch every year.
During the fiscal cliff negotiations, Congress passed the patch and created a provision so it will raise with inflation every year, said Christine Haslam, a certified public accountant and owner of Haslam Tax & Accounting Services in Cherry Creek.
Teachers can still write off $250 for supplies purchased for their classrooms, Haslam said.
Another large extension passed is for the work opportunity tax credit. Businesses that hire veterans or someone with a qualifying disability can claim the credit.
Employers can get a credit of up to 25 percent of the employee’s first-year wages if the employee works 120 hours and up to 40 percent of the wages if the employee works 400 hours.