IRS WANTS INPUT ON NEW 1099
Washington, D.C. - The Internal Revenue Service is asking for public comments on how to most effectively carry out a law that will require businesses to report a wider range of payments to contractors, vendors and others, usually on Form 1099, starting in 2012, to help it implement the provision in such a way that it would minimize the burden and avoid duplicate reporting.
The Treasury and the IRS have issued a proposed regulation under which many business purchases made with credit or debit cards would be exempt from the new reporting requirement because they will already be reported by banks and other payment processors.
The change, enacted in March but not effective until 2012, will expand the existing reporting requirements to include a business' payments related to goods and other property, and payments to most corporations.
Comments can be e-mailed to comments@irscounsel.treas.gov. Include "Notice 2010-51" in the subject line.
IRS WARNS OF LIMITS ON MORTGAGE DEDUCTIONS
Washington, D.C. - The Internal Revenue Service is cautioning taxpayers about restrictions on home mortgage interest deductions. "The IRS reminds taxpayers that interest deductions on home mortgages are limited, including limitations for home acquisition and home equity indebtedness," said IRS Headliner Volume 299. "There is one limit for loans used to buy, build or substantially improve a residence - called home acquisition debt. There is another limit for loans secured by a qualified residence but used for other purposes - called home equity debt. Internal Revenue Code Section 163(h) (3) provides guidance for the limitations on the home mortgage interest deduction."
"The law allows taxpayers to deduct interest on two categories of indebtedness secured by their residences. Acquisition indebtedness is used to acquire, construct or substantially improve a residence, and cannot exceed $1,000,000. Home equity indebtedness is any [other] debt, and cannot exceed $100,000."
