Amending your tax return

Ever wondered what you would do if after filing your taxes you realized that you missed a deduction, didn’t correctly interpret a tax law change that impacted you, or simply made a mistake? The IRS offers a solution for both personal and business tax returns which allows taxpayers to fix their originally filed return by filing an amended one. The amended return generally needs to be filed within three years (including extensions) after the date you filed your original return. If you filed your return prior to April 15th it will be considered filed on April 15th regardless of when it was received by the IRS. However, if you extended your return it will be the date you actually filed your return.

The items that can be amended on your return are, among other things, virtually all income and deductions, tax credits, dependents, filing status, certain elections, previous changes by the IRS, and the use of a carryback of a loss or unused credit.

For individuals, this is done by filing form 1040X which is only two pages long. However, you need to recalculate your entire return in order to complete this form. It is a summary of your changes and calculations as well as provides a brief summary of the reasons for amending your personal return. You are also required to attach any schedules or statements that have been changed from the original filing. The IRS does not require you to attach your originally filed return.

Unfortunately, at this time the IRS is not accepting amended returns in their electronic file system, so amended returns need to be mailed. If you are amending multiple returns they need to be mailed in separate envelopes to the appropriate IRS center.

To monitor the status of your amended return visit and click on “Where’s my Amended Return”, or you can call 1-866-464-2050. Generally, it takes 8 to 12 weeks to for amended returns to be processed, though it sometimes takes longer due to the potential benefits many firms offer a free review of recently filed tax returns. Though not typical, our office has handled cases where taxpayers are refunded tens of thousands of dollars in taxes that were overpaid on originally filed returns, and better yet, IRS even adds interest to those refunds.

Please remember these are general rules and you should always speak with your trusted advisors about your particular situation.

Brian is a CPA at Gamwell Caputo Kelsch & Co., PLLC in Conway, NH and can be reached at 603-447-3356. Brian welcomes any article feedback or questions for future article consideration.

Can you reduce your taxes due to the Coös County Job Creation Tax Credit?

The Coos County Job Creation Tax Credit was created in 2008 and provides a credit against New Hampshire business taxes for every full-time, year-round employee that was hired during the year. To qualify for the credit, each new employee must receive wages paid, including amounts paid for medical and dental benefits, equal to or greater than 150 percent of the New Hampshire state minimum wage. The minimum wage is currently set at $7.25 for New Hampshire, which is consistent with the Federal rate.

If the employer pays wages that equals or exceeds 150 percent of minimum wage, they will receive a credit of $750 per employee. The credit has a maximum benefit of $1,000 per employee if the employer pays wages exceeding 200 percent of the minimum wage. This credit is renewable for four consecutive years, giving an employer a total of 5 years of benefits. The initial credit has been extended five years, so that the year ended December 31, 2018 is the latest tax year an employer can take the credit for the first time. If the credit is elected for the year ended December 31, 2018, employers can take advantage of the credit for the following four consecutive years, until the year ended December 31, 2022.

A “new employee” for purposes of this credit does not include an employee that has transferred to a new position because of a merger or restructuring. Employees who are laid-off and rehired within 270 days to the same position also do not qualify as a new employee for the purposes of this credit. Additionally, a new employee must be on the payroll for at last 90 days before the employer can initially claim the credit. If the job the employer created is terminated for any reason during the five consecutive tax periods after the initial application, the employer cannot claim the credit for the years that the position is not in existence.

The Job Creation Tax Credit is first applied to the Business Enterprise Tax (BET). Any remaining portion of the credit can then be used against the Business Profits Tax (BPT). If there is still an unused portion of the credit after being applied to these taxes, the remaining credit may be carried forward for up to five years.

Employers that are applying for the credit for the first time need to file an application with the Department of Resources and Economic Development on or before the three months after the close of the business’ tax year. The Department will then notify the business of the amount of credit that they are eligible to claim. Once the business is notified of the credit amount, they can record the credit on New Hampshire Form DP-160, Schedule of Credits, which should be filed along with the business tax return. Employers can obtain an application for the Coos County Job Credit on the New Hampshire Department of Revenue website.

According to the New Hampshire Department of Revenue, at least seventeen taxpayers have taken advantage of the credit since its inception in 2008, creating over 85 new jobs. The amount of credits provided by the state for the years 2009 – 2013, has totaled $156,350, with approximately $68,000 provided in 2013 alone.

Please remember these are general rules and you should always speak with your trusted advisor about your particular situation.

Amanda Dubs is a Berlin, New Hampshire resident practicing as a Certified Public Accountant at Gamwell Caputo Kelsch & Co., PLLC in Conway, New Hampshire.

Are there any tax breaks for summer camp for my kids?

The child and dependent care credit is designed to assist working parents and guardians with some of the expenses involved in raising a child or caring for a disabled dependent. The credit, which varies depending on the taxpayer’s earned income, is based on the expenses paid to provide child or dependent care services so that parents can work.

You may be aware that daycare fees qualify for the child and dependent care credit, but the IRS actually considers much more than just the cost of daycare for this credit. Day camp or summer camp fees, even for camps centered on a sport or activity, qualify if the camp was selected to provide care while the parent or parents were at work. However, overnight camps do not qualify. Qualifying expenses also include before- and after-school care, childcare provided by a babysitter or licensed dependent care center that provides care for the qualifying person.
The IRS requires that the name, address, and tax identification number be reported by the individual claiming the qualifying expenses.

The tax credit is up to 35 percent of qualifying expenses up to $3,000 for one child or dependent, or up to $6,000 for two or more children or dependents.

In addition to qualify for the credit you must have earned income and the expenses must have been used so that you could work or look for employment.

While there are restrictions on the credit you should be sure to consider this tax break when sending the kids to camp this summer and completing your 2014 tax return.

Please remember these are general rules and you should always speak with your trusted advisors about your particular situation.

Brian is a CPA at Gamwell Caputo Kelsch & Co., PLLC in Conway, NH and can be reached at 603-447-3356. Brian welcomes any article feedback or questions for future article consideration.