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Tax Tips: Undelivered tax refunds may arrive as Christmas gifts from Uncle Sam

Kelly J. Bullis
For the Nevada Appeal

IRS as Santa Claus? Believe it or not, the IRS is trying to give away $165 million. Actually, it is undelivered refund checks for the 2009 tax year (just ended Oct. 15. The IRS says that there are 111,893 taxpayers who are due a refund check who have moved and left no forwarding address.

So, if you were expecting a refund and you have moved in the last year or so, maybe you should go to the website https://sa2.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp to find out the status of your refund and to change your address with the IRS if they indicate your refund was returned by the Post Office as undeliverable.

Congress is expected to restore the Bush tax cuts for at least 2011. This means your income tax withheld from each paycheck in 2011 will not change as long as your gross pay is the same. Hooray! (Scrooge may show up and mess this up … keep watching.)

Health care law “gift” for small businesses. An employer who has fewer than 25 full-time equivalent employees in 2010 (and beyond) with “average annual wages” paid of less than $50,000 per employee and who pays at least half of the cost of providing health care coverage for each employee enrolled in the plan is entitled to a tax credit.

The credit is computed by multiplying 35 percent times the total employer’s share of healthcare premiums paid. Note, this credit is reduced until it becomes 0 percent as the average wages per employee go up. The cutoff point is $50,000 of average wages.

Self-employed business owners will find something under the tree for them, too. For 2010 only, self-employed taxpayers will be allowed to deduct their qualifying self-employed health insurance for computing self-employment taxes. That’s like an instant 14.5 percent tax credit on health insurance premiums!

Last chance to buy a business vehicle and get a larger tax benefit. The maximum first year write-off for new cars purchased in 2010 is $11,060.

That will fall to about $3,000 starting Jan. 1, 2011. Also, the limit is higher for new SUVs weighing over 6,000 pounds (loaded). If the qualifying SUV is put in use before the end of 2010, half the cost is eligible for bonus depreciation.

Human resource folks get a little “stocking stuffer.” IRS will not be requiring employers to report the value of health coverage on 2011 W-2s (filed by Jan. 31, 2012).

This was originally mandated as part of this year’s health care law.

The delay is designed to give software providers more time to make necessary changes to their payroll systems. I bet everybody at Intuit (QuickBooks) in Reno is doing a Christmas dance!

I would like to wish everybody a Merry Christmas from Bullis and Company CPAs. May you and your family also enjoy a very happy new year!

• Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459.