Questions about Identity Theft and home use for a business were among the calls fielded in the final Tax Call-In program on Saturday.
The program, co-sponsored by the Beacon Journal and the Ohio Society of CPAs, included three free call-in events and an online tax chat. The full transcript of the chat and all tax stories by the Beacon Journal, including the special tax section, can be found at www.ohio.com/taxes.
Saturday morning, eight volunteers from the Akron-area firm SS&G answered questions from 203 callers. In total, 405 readers were helped in the call-ins and online chat.
A caller asked CPA Doug Klein whether a stove she had bought during her kitchen remodel would qualify her for the energy-efficiency tax credit.
Klein said the stove did not qualify because the tax credit is only available for energy-efficient products such as qualifying doors, windows, air conditioners and furnaces. The credit is available up to a $500 lifetime cap.
Klein also took a call from a man who received a notice from the IRS saying there was a problem with his 2012 return and to please call. They said there was a problem and please resubmit. However, the IRS wouldn’t tell the man anything, but asked him identity-type questions. He resubmitted in December and still hasn’t heard anything. It’s likely someone else filed in his name, and they wouldn’t tell him anything. Klein suggested he call a specific IRS unit for ID theft, 800-908-4490. Once he does get things ironed out for his 2012, he will get interest from April 15th through the day the check is cut.
He was concerned because he needs to file for 2013; Klein said ID theft would kick out an electronic filing, so he should file a paper form, which the reader said he did anyway. If it is determined the caller is a victim of ID theft, the IRS will assign him a PIN for future electronic filings.
CPA Megan McElroy took a phone call from a man who said he was self-employed and used to go somewhere to get his taxes filed for free, but once they stopped offering the service, he stopped filing an income tax return. The man had not filed for seven years.
McElroy said if he was self-employed, he would likely still owe self-employment tax for those years. She told him he would also be penalized for late filing. McElroy suggested the man seek the help of a tax professional to try to help him reduce his late-payment penalties.
Staff accountant Tina Holyak took a call from a woman whose parent passed away and multiple children received an inheritance of the family home. The adult children sold the property at the same value it was appraised for and wondered if the proceeds were a taxable gain. Holyak told the caller the adult children should all take their share of the proceeds as a taxable gain. The basis for determining the gain would be the value of the property on the date of the mother’s death. The proceeds would be reportable, but because the basis equals the proceeds, there’s no gain or loss.
CPA Dave McClain took a call from a person asking about deducting for the business use of a home.
McClain explained that there is a new simplified option for home office deduction available for 2013 taxes, which is a standard deduction of $5 per square foot of home used for business with a maximum of 300 square feet. The simplified option cuts down the need for extra record-keeping.
A consumer can either use the simplified option or the regular method. In order to qualify for the home-business deduction, the portion of the house must be used exclusively on a regular basis for the business.
Switching from one method of deduction in one year to the other method in the next year could mean some recalculations.