“Hold off on tax preparation”, expert says

Don’t pay your taxes – not right now, at least. Find out about changes to the tax laws – that are still occurring almost daily! We’ve got the story right here…

Elaine E. Elsea, LTC, of Portland Tax Company, tells how the rapidly-changing tax codes are making the preparation of tax returns challenging this year.

Story and photos by David F. Ashton
Are you worried about that e-mail that just came in from the Internal Revenue Service (IRS)?

“Forget about it,” Elaine E. Elsea, LTC, from Portland Tax Company. “It’s a scam. The IRS never contacts taxpayers by e-mail – they do it by letter, and very occasionally, by telephone.”

This was one of many topics Elsea covered in her talk to members and guests of the Midway Business Association on January 11.

“At the last day-long tax seminar we attended, the trainers kept saying that much in the federal tax code is still in flux,” warned Elsea. “In fact, the IRS is asking taxpayers with certain tax deductions to wait until late February to file. They say they don’t have their software ready, due to Congress passing the two-year extension of the Bush-era tax cuts.”

And, the State of Oregon hasn’t “reconnected” with Federal tax codes, as of the end of the year, the tax expert said. “Oregon is asking taxpayers to wait until mid-February to file, hoping the Oregon Legislature will conduct an emergency meeting to reconnect to Federal law.”

> We can’t detail here all of the tax tips Elsea gave those at the meeting, but here are some of the highlights …

Tax expert Elaine Elsea says tax changes will improve the lot of some, and hurt others.

Help for sole proprietors
In the past, Elsea said, sole proprietors haven’t gotten the best tax treatment with health care insurance. “Now, on the federal level, they’ll be able to deduct their health insurance from their Self Employment taxable income, to reduce their Social Security Tax liability.”

Because the TriMet tax is based on self-employment income, look for it to be reduced because of the health care adjustment, Alsea said.

Other federal tax law modifications include:

Mileage – remains at $.50/mile; but will go up a penny to 51 cents for year 2011.
Employer Paid Child Care Credit – an amount up to 25% is still available, and will be through 2012.
“Start-up expense allowance” doubles – It increases from $5,000 to $10,000.
Educational assistance – Employers can continue to provide tax-free educational assistance of $5,250 annually through 2012.
Bonus Depreciation – A 100% Bonus Depreciation deduction for purchases dated September 9, 2010, runs through December 31, 2011.

Alsea also went over numerous changes in personal IRS filings. “First-time home buyers who must repay the credit they received must begin repayment this year,” she pointed out. “Personal casualty losses are not subject to amounts over $100, down from the $500 limit.”

On the State level, new tax rates are in effect, thanks to Measure 66 and 67, voted in last year.

Other changes include:
There is no longer a $2,400 unemployment exclusion in Oregon, or on the federal level.
Large donations often trigger an audit. If a donated item is said to be worth more than a few thousand dollars, get an official appraisal to back up the claim.
Some energy efficiency upgrades to rental properties’ appliances may earn the landlord certain tax credits.

Taxes are due on April 18 this year, Elaine Elsea says.

Because April 15 falls on a Friday, Alsea pointed out “The IRS says the actual filing date will be set for Monday, April 18th. The State of Oregon, and City of Portland are following suit; you get an extra weekend to do your taxes.”

Please don’t expect Alsea to give tax advice over the phone or by e-mail. But, to reach her, her address is portlandtax@comcast.net.

“SE 122^nd Avenue Plan” explored on February 8
Come learn all about this new business group dedicated to helping neighbors and businesses improve the southern end of Outer East Portland.

This month, Christina Scarzello, Senior Planner, East District and Liaison, Portland Bureau of Planning and Sustainability presents “SE 122^nd Plan: Past, present and future”

Visitors ARE welcome and the presentation is free (but you pay for your own lunch). Their meeting runs from 11:45 AM until 1 PM at Bill Dayton’s PIZZA BARON Restaurant on SE 122^nd Avenue, just south of Division Street. For more information, see their website: CLICK HERE.

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