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On the Grow
Brady, Martz / Reichert, Fisher Merge
Reichert Fisher and Brady Martz are pleased to announce that Reichert Fisher will be merging its accounting practice with Brady Martz effective October 1, 2009. The combined firm will continue to operate under the name of Brady, Martz & Associates, P.C.
Founded in 1976, Reichert Fisher is a full service accounting, tax and consulting firm with 18 people, including four shareholders, and offices in Dickinson and Williston, ND. In addition to auditing and income taxes, the firm specializes in services to the oil & gas and manufacturing industries and services to estates and trusts.
Jerry Fisher, president of Reichert Fisher, said "This merger will provide us with deeper resources and broader areas of expertise to serve our clients, including industry specific expertise and specialized tax & business consulting".
Brady Martz was founded in 1928 and in addition to the new offices from the merger, the firm has offices in Grand Forks, Minot and Bismarck, ND and Thief River Falls, MN. Brady Martz is a full service accounting, tax and consulting firm with specialization in a wide range of industries including financial institutions, construction, health care, manufacturing, governmental, auto dealerships, public utilities, nonprofits, native american tribes and agricultural.
Scott Stinar, president of Brady Martz, said "Brady Martz has a long history of providing services in ND. We feel fortunate to be expanding our presence in the state with a firm of the caliber and quality of Reichert Fisher. We are also excited about acquiring a physical presence in the communities of Dickinson and Williston and about what is happening in western North Dakota surrounding oil activity".
Tom Reichert, Jerry Fisher, Steve Oyloe and Nathan Sorenson, current shareholders of Reichert Fisher PC, will become shareholders of Brady Martz with the merger. After the merger, Brady Martz will have six offices and 160 people, including 29 shareholders, serving 9,800 clients.
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Tax Credits
Home Buyer Credit Expanded / Extended
The First Time Homebuyer Tax Credit was extended through April 30, 2010. Additionally, effective November 7, 2009, qualified “Long-Term Residents” may qualify for their version of the home buyer credit (up to $6,500). GENERALLY, the ability to qualify for the home buyer credit expires on April 30, 2010; it is possible to extend the tax credit time period to June 30, 2010 if there is a qualified written binding agreement (see below) in place. Here are some helpful tidbits regarding the home buyer credit and how it relates to new construction and/or Long-Term Residents:
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Purchasers of newly constructed homes where a settlement statement is not available should, in order to claim the tax credit, include in their tax filing a copy of the Certificate of Occupancy showing the owner’s name, property address and date of certificate.
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A Long-Term Resident that enters into an agreement to purchase an existing home prior to November 7, 2009, but does not complete the purchase until after November 7, 2009 may qualify for the tax credit if the closing occurs before the tax credit’s expiration date.
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Long-Time Residents purchasing a newly constructed home may claim the tax credit if they occupy the residence prior to May 1, 2010, even if the construction of the home started prior to November 7, 2009.
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A taxpayer who enters into a written binding contract before May 1, 2010, with a planned closing date of before July 1, 2010 may claim the tax credit if the closing does in fact occur before July 1, 2010.
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Under the written binding contract rule, a taxpayer who before May 1, 2010, entered into a written construction contract with a homebuilder, where the contract provides for a completion of the home before July 1, 2010, can take the tax credit if the taxpayer does in fact occupy the home on or before June 30, 2010.
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Since the written binding contract rule requires a copy of the binding contract be included as part of the tax filing, it is our belief that a home being self-constructed by the taxpayer will not qualify for the tax credit unless the home is completed AND occupied prior to May 1, 2010.
These tidbits are specific to certain situations and do NOT address all aspects of the First Time Homebuyer Tax Credit. You should coordinate these activities with your tax adviser. If Brady Martz can assist you with your tax planning needs and/or the home buyer tax credit please contact us. You can contact us at one of our six offices or by contacting the Tax Services Contact.
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Alert!
IRS Scam E-mail
Our office is aware of several e-mails that have been received by taxpayers, purportedly from the Internal Revenue Service. The e-mails are FRAUDULENT and are usually “phishing” schemes where the sender seeks to trick the recipients into providing personal and financial information that can be used to gain access to, and steal the e-mail recipient’s assets. The fraudulent e-mails are an ongoing concern and taxpayers have to exercise caution to protect themselves and their assets.
The e-mails commonly claim to be about tax refunds or unreported income. Common phishing e-mail subjects have been:
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Making Work Pay refunds
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Economic stimulus payments
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Tax rebates
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Form W-8Ben regarding foreign status withholding
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Inheritances
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Lottery winnings
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Unclaimed property
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Notice that your tax returns are being audited.
The Internal Revenue Service DOES NOT use e-mail to initiate communications with taxpayers. If you receive e-mail that claiming to be from the Internal Revenue Service, you should view the e-mail as being fraudulent. The IRS recommends that you:
The Internal Revenue Service has a webpage which provides additional guidance on different types of scams (e-mails, letters, telephone), how to protect yourself and what to do if you are contacted by the scam e-mails or bogus websites. You may learn more from the Internal Revenue Service at:
If Brady Martz can be of assistance please do not hesitate to contact one of our offices.
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AMT Issues
Alternative Minimum Tax
The Alternative Minimum Tax attempts to ensure that anyone who benefits from certain tax advantages pays at least a minimum amount of tax.
Here are seven facts the Internal Revenue Service wants you to know about the AMT and changes to this special tax for 2009.
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Tax laws provide tax benefits for certain kinds of income and allow special deductions and credits for certain expenses. These benefits can drastically reduce some taxpayers’ tax obligations. Congress created the AMT in 1969, targeting taxpayers who could claim so many deductions they owed little or no income tax.
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Because the AMT is not indexed for inflation, a growing number of middle-income taxpayers are discovering they are subject to the AMT.
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You may have to pay the AMT if your taxable income for regular tax purposes plus any adjustments and preference items that apply to you are more than the AMT exemption amount.
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The AMT exemption amounts are set by law for each filing status.
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For tax year 2009, Congress raised the AMT exemption amounts to the following levels:
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$70,950 for a married couple filing a joint return and qualifying widows and widowers;
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$46,700 for singles and heads of household;
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$35,475 for a married person filing separately.
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The minimum AMT exemption amount for a child whose unearned income is taxed at the parents' tax rate has increased to $6,700 for 2009
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- If you claim a regular tax deduction on your 2009 tax return for any state or local sales or excise tax on the purchase of a new motor vehicle, that tax is also allowed as a deduction for the AMT.
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Education Expenses
Deduction & Credit Opportunities
College can be very expensive. To help students and their parents, the IRS offers the following five ways to offset education costs.
1. The American Opportunity Credit
This credit can help parents and students pay part of the cost of the first four years of college. The American Recovery and Reinvestment Act modifies the existing Hope Credit for tax years 2009 and 2010, making it available to a broader range of taxpayers. Eligible taxpayers may qualify for the maximum annual credit of $2,500 per student. Generally, 40 percent of the credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes.
2. The Hope Credit
The credit can help students and parents pay part of the cost of the first two years of college. This credit generally applies to 2008 and earlier tax years. However, for tax year 2009 a special expanded Hope Credit of up to $3,600 may be claimed for a student attending college in a Midwestern disaster area as long as you do not claim an American Opportunity Tax Credit for any other student in 2009.
3. The Lifetime Learning Credit
This credit can help pay for undergraduate, graduate and professional degree courses – including courses to improve job skills – regardless of the number of years in the program. Eligible taxpayers may qualify for up to $2,000 – $4,000 if a student in a Midwestern disaster area – per tax return.
4. Enhanced benefits for 529 college savings plans
Certain computer technology purchases are now added to the list of college expenses that can be paid for by a qualified tuition program, commonly referred to as a 529 plan. For 2009 and 2010, the law expands the definition of qualified higher education expenses to include expenses for computer technology and equipment or Internet access and related services.
5. Tuition and fees deduction
Students and their parents may be able to deduct qualified college tuition and related expenses of up to $4,000. This deduction is an adjustment to income, which means the deduction will reduce the amount of your income subject to tax. The Tuition and Fees Deduction may be beneficial to you if you do not qualify for the American opportunity, Hope, or lifetime learning credits.
You cannot claim the American Opportunity and the Hope and Lifetime Learning Credits for the same student in the same year. You also cannot claim any of the credits if you claim a tuition and fees deduction for the same student in the same year. To qualify for an education credit, you must pay post-secondary tuition and certain related expenses for yourself, your spouse or your dependent. The credit may be claimed by the parent or the student, but not by both. Students who are claimed as a dependent cannot claim the credit.
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