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Minnesota soldiers, sailors and veterans who have served in combat zones can claim a significant state tax credit, whether or not they know it. More than 2,300 members of the Armed Forces who served during 2009 still have not filed and are facing an Oct. 15 deadline for making a claim, the Minnesota Department of Revenue says. The tax credit is refundable, meaning it applies even if the taxpayer has no income or does not owe any state income tax.

To file, use Form M99, “Credit for Military Service in a Combat Zone.” (www.revenue.state.mn.us/Forms_and_Instructions/2009/forms_m99_09.pdf).

Soldiers and veterans who served in hazardous duty areas in 2010, 2011 and 2012 also can submit claims now.

The Minnesota Department of Revenue lists other tax breaks at its “Members of the Military” Web page.

 The Internal Revenue Service allows workers to tap their IRAs before the normal distribution age of 59½ — if it’s done correctly. There is a provision for early distributions which does not carry the 10% early withdrawal penalty.  The early withdrawals from the IRA account need to be equal payments over a minimum period of 5 years.

 But, if you modify those regular payments, you’ll lose the exception and trigger the 10 percent “early distribution recapture tax.”

 So, view that account only as an outgoing one. For example, you’ll want to be careful NOT to roll over money from your workplace 401(k) or 403(b) plan — or from one of your other IRAs — into it. The IRS will look at that as a change in the payment schedule and you’ll wind up owing the penalty!

 Early distributions from IRAs are complex for other reasons, too. Contact us to find your way through the taxing details.

So, what’s new in state taxes?

A slew of tax changes occurred in this year’s session of the Minnesota Legislature! The  Department of Revenue now is churning out “What’s New” updates and various Fact Sheets to explain 2013 tax codes.

You can read them at the agency’s Web site at www.revenue.state.mn.us. Some educational videos also are available.

In one update, the state agency says it is still is waiting for IRS guidelines to figure out how same-sex marriage will affect taxation of those couples. But, beginning Aug. 1, Minnesota will accept the “married” as the filing status for legally married same-sex couples. That new filing status extends to other forms given to employers, such as Form W-4 for withholding.

An extensive discussion of property taxes also has been issued by MDOR.

So, here are some briefings that may fit your tax situation:

Assumed Names filed before September 6, 2011, have a 10-year term and will not need to be renewed until l six months prior to the expiration on date. At the end of the 10 years, filing an annual renewal will change the duration on of the assumed name from a 10-year term to perpetual. From then on, an annual renewal must be filed each calendar year, as is the case for other business types; failure to file a renewal will result in expiration on of the business. Any assumed name that expires as a result of failing to file the annual renewal may be reinstated by filing the annual renewal with the reinstatement fee, effective August 1, 2013.

This office will no longer mail the required paperwork to assumed name-holders at the end of the 10-year period.

See more at http://www.sos.state.mn.us/index.aspx?page=180

News Laws Governing Business Filings Effective August 1

Laws 2013, Chapter 110 passed the Legislature without opposition, was signed into law by Governor Dayton and is effective August 1.  This bill provides many technical improvements in the laws governing business filings in Minnesota.

High-income Minnesotans received a state tax hike earlier this year, but many hadn’t felt it in their paychecks – until now. That could create a problem.

On June 20, the state Department of Revenue reflected new legislation and added a top-end tax bracket of 9.85 percent to the withholding tax tables used by employers. That was an increase from the prior 7.85 percent.

Here’s the stickler. The new income tax rate actually applied to all 2013 pay, from Jan. 1 forward. So, some Minnesotans could come up short in state tax payments at year-end if they don’t try to catch up.

To offset the shortfall, the Department of Revenue suggests two options: Boosting withholding from paychecks further (use Form W-4MN) or making separate, estimated tax payments.

You’ll probably want to talk to your personal tax advisor to see if you’re affected and what you should do. In general, the 9.85 percent bracket applies to income above:

· $250,000 for married people who file a joint return, or for qualifying widows(ers),
· $125,000 for married people who file separate returns,
· $200,000 for heads of households, and
· $150,000 for single people.

March 26, 2013

Department now offers free electronic filing for property tax returns

ST. PAUL, Minn. –– The Minnesota Department of Revenue is pleased to announce that most homeowners can now file for their property tax refund on our website for free.

 “We are thrilled to offer a free electronic filing option. It’s something we have worked toward for years,” said Terri Steenblock, Assistant Commissioner for Individual Taxes. “Homeowners who choose this option will be able to file their property tax return quickly and easily, allowing them to receive their refund even faster.”

 To file electronically for free, you must be:

·         A homeowner filing an original property tax refund

·         Filing a refund for property taxes paid in 2012 or later

·         Living in your home and not renting or using it for a business

·         Electing direct deposit for your refund

 What you need to electronically file:

·         Social Security number

·         Address

·         Valid email address

·         Household income

·         Qualifying dependent information

·         County property tax statement

·         Your bank account and routing number

 This new, free e-filing option saves the state more than $400,000 a biennium.

The department is committed to doing everything we can to expand our online services.

To electronically file your property tax return, click here. Or type keyword homeowner in the Search box on our website, www.revenue.state.mn.us.

To view our instructional video on filing property tax returns electronically, click here.

 Contact: Lisa Erickson

 Phone: 651-556-6397

 [email protected]   

Effective 9:00am Eastern time on Sunday, February 10, 2013, the IRS will start processing 2012 returns that contain Form 4562, Depreciation and Amortization. This will include the Form 1040-family tax returns, Form 1065/1065-B, Form 1120-family tax returns and Form 990-family tax returns.

On Thursday, February 14, 2013, the IRS plans to start processing 2012 returns that contain Form 8863, Education Credits.