Tax Topics

From WBRZ-TV:

If you file by paper, the Louisiana Department of Revenue estimates it will take between 12 and 16 weeks to get your return. E-file on the state’s website here, and you could get your return in ten business days, according to Byron Henderson with the Department of Revenue.

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BATON ROUGE – The Louisiana Department of Revenue (LDR) encourages all taxpayers to file electronically when they submit their 2011 state individual income tax returns.

“Electronic filing is the best way to ensure error-free returns and speedy income tax refunds,” said Secretary of Revenue Cynthia Bridges.

LDR began accepting 2011 Louisiana Individual Income Tax Returns on January 17.  The state filing deadline is May 15.

In addition to electronic filing, a careful review of your tax return can help to avoid unnecessary delays.  Many refunds are delayed because of common errors and omissions. 

Steps to avoid delayed refunds include:

• File electronically.  The average processing time for refunds is ten business days when using electronic options such as Louisiana File Online, the state’s free tax filing web application.  For paper returns, the processing time is 12 to 16 weeks.  Visit www.revenue.louisiana.gov/fileonline.
• Double check the accuracy of your return.  Ensure that all Social Security numbers and tax computations are correct.  Math errors and incorrect tax table information are leading causes of delayed refunds.
• Include all supporting documentation such as W-2s.  Use paperclips, not staples, if filing a paper return.
• Don’t forget to sign the return.
• Update your mailing address with the United States Postal Service and the Louisiana Department of Revenue.
• For paper returns, be sure to attach the proper label to the mailing envelope.

To avoid the potential for late fees and other penalties, taxpayers needing additional time to file must request filing extensions in a timely manner.  This year’s deadline for a state filing extension request is May 15, 2012.  Visit www.revenue.louisiana.gov/extensions.

If a tax payment is due, include the remittance coupon with paper returns to ensure proper posting.  Make checks or money orders payable to the Louisiana Department of Revenue.  Do not send cash. 

Do not include copies of the federal return with the state return.

BATON ROUGE – The Louisiana Department of Revenue (LDR) advises all taxpayers to ensure their mailing addresses are up to date in their LDR records and with the United States Postal Service. 

“One of the most common causes of delayed income tax refunds is an incorrect mailing address,” said Secretary of Revenue Cynthia Bridges.  “Any refund sent to an incorrect address is returned to the Department of Revenue, resulting in a substantial delay to the taxpayer.”

Taxpayers who have moved since their last tax filing should submit a change-of-address form at the post office.  In addition, they can update their addresses with the Department of Revenue at www.revenue.louisiana.gov/AddressChange.

The Department of Revenue will begin accepting 2011 individual and corporate state income tax returns on January 17, 2012.

For more information, call the LDR Customer Service Center at 225-219-7462.

BATON ROUGE – Secretary of Revenue Cynthia Bridges announced on Friday two appointments to the management team of the Louisiana Department of Revenue (LDR).

Jane Smith joins LDR as Deputy Secretary, assisting the Secretary with administrative and legislative matters.  Smith is a former state lawmaker first elected to the Louisiana House of Representatives in 1999.  Her legislative experience includes tenure as vice chair of the Ways and Means Committee, in addition to assignments on House and Governmental Affairs, the House Executive Committee, the Joint Legislative Committee on Capital Outlay, and the Special Committee on Military and Veterans Affairs.  She is a former school superintendent who earned her Bachelor of Science and Master of Education degrees from Northwestern State University.

Joseph Vaughn will serve as Assistant Secretary with supervisory authority over the Department of Revenue’s tax audit programs.  Vaughn is a veteran tax administrator with over 20 years’ experience at LDR, having served as director of the Alexandria regional field office for 12 years, and most recently as Assistant Director over the newly re-organized North Louisiana District.  Mr. Vaughn has also worked in the private sector in various audit management positions for the Roy O Martin organization and the Revenue Recovery Group, Inc.  He holds a Bachelor of Science degree in Business Administration from LSU.

BATON ROUGE – The Louisiana Department of Revenue (LDR) will begin accepting 2011 Louisiana individual and corporation income tax returns on Tuesday, January 17, 2012, including electronic returns filed with commercial tax preparation software and LDR’s electronic tax filing applications, Louisiana File Online and LaTAP.  Income tax forms and booklets for the 2011 tax year will also become available on that date.   Forms will be available at all LDR offices and at public libraries throughout the state, with the exception of those in Jefferson Parish.

LDR recommends all taxpayers file their taxes electronically.  Electronic filing ensures the fastest income tax refunds and is the only way to enjoy the benefits of direct deposit.  The average refund processing time for electronic returns is 10 business days. For paper returns, it is 12 to 16 weeks.

The Department of Revenue encourages all taxpayers to ensure their mailing addresses are up to date.  If you have moved since your last tax filing, please update your address with the United States Postal Service.  In addition, you can change your address with the Department of Revenue at www.revenue.louisiana.gov/AddressChange.  Failure to update a changed mailing address can result in delayed income tax refunds and correspondence.

From WBRZ.com:

BATON ROUGE – Louisiana taxpayers who do not choose direct deposit for their state income tax refunds will receive those refunds in the form of a pre-paid debit card, the Department of Revenue announced Monday.

The Louisiana MyRefund Card permits free teller-assisted withdrawals at all banks and credit unions that accept visa; it allows unlimited no-fee cash-back transactions at retail merchants;  and it allows no-fee cash withdrawals at all ATMs operated by Chase, the vendor bank issuing the card. In addition, MyRefund card holders can manage the funds in their refund accounts entirely online.  Online services include the ability to check card balances for free, online bill pay, and the ability to issue oneself a paper check for the full card balance.

Taxpayers who prefer checks can also call or visit any LDR office for assistance.  However, they must do so before activating the MyRefund card.

“Security and convenience are the primary benefits of the MyRefund Card,” said Secretary of Revenue Cynthia Bridges.

The card is inactive when it arrives by mail.  The recipient must call a toll-free number to activate it with uniquely identifying personal information.

LDR will issue the MyRefund Card to taxpayers who file paper individual state income tax returns and to individual electronic filers who do not choose direct deposit for their refunds. 

 Information is available at www.revenue.louisiana.gov/myrefund.

WASHINGTON — Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years. Some of these changes include the following:

Special Charitable Contributions for Certain IRA Owners

This provision, currently scheduled to expire at the end of 2011, offers older owners of individual retirement accounts (IRAs) a different way to give to charity. An IRA owner, age 70½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charity. This option, created in 2006, is available for distributions from IRAs, regardless of whether the owners itemize their deductions. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible.

To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity. Amounts so transferred are not taxable and no deduction is available for the transfer.

Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.

Amounts transferred to a charity from an IRA are counted in determining whether the owner has met the IRA’s required minimum distribution. Where individuals have made nondeductible contributions to their traditional IRAs, a special rule treats transferred amounts as coming first from taxable funds, instead of proportionately from taxable and nontaxable funds, as would be the case with regular distributions. See Publication 590, Individual Retirement Arrangements (IRAs), for more information on qualified charitable distributions.

Rules for Clothing and Household Items

To be deductible, clothing and household items donated to charity generally must be in good used condition or better. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to meet this standard if the taxpayer includes a qualified appraisal of the item with the return. Household items include furniture, furnishings, electronics, appliances and linens.

Guidelines for Monetary Donations

To deduct any charitable donation of money, regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Bank records include canceled checks, bank or credit union statements, and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.

Donations of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. For payroll deductions, the taxpayer should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.

These requirements for the deduction of monetary donations do not change the long-standing requirement that a taxpayer obtain an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. However, one statement containing all of the required information may meet both requirements.

Reminders

To help taxpayers plan their holiday-season and year-end giving, the IRS offers the following additional reminders:

• Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of 2011 count for 2011. This is true even if the credit card bill isn’t paid until 2012. Also, checks count for 2011 as long as they are mailed in 2011.
• Check that the organization is qualified. Only donations to qualified organizations are tax-deductible. IRS Publication 78, searchable and available online, lists most organizations that are qualified to receive deductible contributions. It can be found at IRS.gov under Search for Charities. In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even if they are not listed in Publication 78.
• For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to individuals who choose the standard deduction, including anyone who files a short form (Form 1040A or 1040EZ). A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) exceed the standard deduction. Use the 2011 Form 1040 Schedule A to determine whether itemizing is better than claiming the standard deduction.
• For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. If a donation is left at a charity’s unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value. Additional rules apply for a contribution of $250 or more.
• The deduction for a motor vehicle, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This rule applies if the claimed value is more than $500. Form 1098-C, or a similar statement, must be provided to the donor by the organization and attached to the donor’s tax return.
• If the amount of a taxpayer’s deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.
• And, as always it’s important to keep good records and receipts.

IRS.gov has Additional information on charitable giving including:

• Charities & Non-Profits
• Publication 526, Charitable Contributions.
• On-line mini-course, Can I Deduct My Charitable Contributions?

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The Times-Picayune reports:

The panel that watches over the flow of state revenues said Wednesday that collections are off by about $198 million this year, forcing cuts in the budget adopted by lawmakers last spring. The Revenue Estimating Conference voted 4-0 to accept the lower estimates prepared by the Legislative Fiscal Office, the arm of the Legislature that tracks economic activity and tax revenues.

Current estimates “appear to be too high,” fiscal office chief economist Greg Albrecht told the panel. He said the biggest shortfall is in the state’s collections of personal income tax, which is off about $142.5 million from earlier projections.

The oil and gas severance tax followed it closely, Albrecht said, down about $128.5 million from what had been projected.

Other areas of state revenues were holding up, such as the state tobacco settlement and sale of lottery tickets. Vehicle sales taxes also are running about $15 million ahead of projections.

The downturn in the numbers means the governor has 30 days to bring the budget in line with the new revenue estimates.

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