Tax preparers waiting for updated software for tax law changes
Minnesotans confused by the new tax law changes might want to see if their preparers get more guidance from the state.
“We were told it would affect one in five (people filing),” said Carrie Robbins of H&R Block. “Then we were told one in 10.”
Some of the retroactive changes actually took place in 2013. Called the “2013 Middle Class Tax Cuts,” the law provides for $49 million in tax cuts for 2013.
Tax preparers are currently awaiting software updates and have already removed an obsolete form.
The changes allow for mortgage insurance deductions for taxpayers earning up to $110,000, working family credits mirroring the Federal Earned Income Tax Credit, a $4,000 deduction of tuition and fees as a higher education deduction, student loan interest and other tax breaks.
Education savings accounts can be deducted if tapped, employer help for education, even adoption expenses are included.
Robbins and co-worker Krystal Nelson said from what they’ve seen so far, some filers are saving a bundle, especially those who’ve been foreclosed on.
“There’s a ‘principal residence indebtedness exclusion’ that is really saving money,” Nelson said.
Homeowners whose lenders agreed to accept less than they owed in a short sale or foreclosure can exclude the amount of debt forgiven.
Cancelled debt for foreclosures used to be considered income.
“Now it’s excluded for certain filings,” Nelson said. Certain income brackets will trigger the refunds.
Teachers who spend their own money for school supplies can deduct up to $250 of those expenses.
As Minnesota tries to synch its deductions with federal filings, more refunds could be the result.
Both women said if you’ve already filed, don’t sweat it. The state will be auditing all claims already filed to see if filers qualify for exemptions.
The state will notify you if you need to amend your return.
The changes have really been no big deal.
“We’ve only seen a few that waited,” Robbins said.
Business filings up
Secretary of State Mark Ritchie reported Tuesday 15,955 new Minnesota businesses were filed in the first three months of 2014. The total slightly outpaces the 15,746 reported in the first quarter of 2013.
“This number of new businesses demonstrates continued solid growth in Minnesota’s economy,” said Ritchie. “I anticipate a robust second-quarter to continue this trend.”
Last year, the Office of the Minnesota Secretary of State reported 58,260 new business filings, the third-highest annual total on record.
The deadline to file taxes or file for an extension is Tuesday, April 15.