Homebuyer Credit = Stimulus for Tax Pros

[Koss]

The new homebuyer credit is likely to generate some extra business in the form of amended returns, for taxpayers buying homes later in the year.

Yes, they could opt to claim the credit on the 2009 return, but many will want the money sooner. At least one or two states are floating the idea of a subsidized short-term loan program that would allow first-time homebuyers to borrow money to help them make a sufficient downpayment, with an agreement to repay the loan with the tax refund generated by the credit...

And some sophisticated clients who are already looking for a house may choose to simply file an extension, and then file their original 2008 tax return after the closing. This could also generate some additional "off-season" business.

I've always wanted to find ways to spread our business out more evenly over the year...

In a rambling post last year, I suggested that we use could Form 3115 to move three-fourths of our individual clients to a fiscal year... thereby staggering our work throughout the calendar year.

The post was satirical in nature. Most clients wouldn't go for it, and putting wage-earners on a fiscal year would have all kinds of unintended consequences.

But I still think it would be kinda cool...

BMK

[JohnH]

Another very good way to spread work out through more of the year is to set an early cutoff date for filing extensions. I generally file extensions on all returns coming in after March 20 (except for the very simple ones and a few other exceptions) and last year I moved the date to March 15. The change didn't seem to mater much to the clients, most of whom have come to expect it. Having a good extension policy relieves a lot of deadline pressure during the crunch and also enables me to accept more work than I ordinarily would. It also preserves lots of flexibility in late March and early April, which is absolultely crucial during that timne.

[Larmil]

The new homebuyer credit is likely to generate some extra business in the form of amended returns, for taxpayers buying homes later in the year.

Yes, they could opt to claim the credit on the 2009 return, but many will want the money sooner. At least one or two states are floating the idea of a subsidized short-term loan program that would allow first-time homebuyers to borrow money to help them make a sufficient downpayment, with an agreement to repay the loan with the tax refund generated by the credit...

And some sophisticated clients who are already looking for a house may choose to simply file an extension, and then file their original 2008 tax return after the closing. This could also generate some additional "off-season" business.

I've always wanted to find ways to spread our business out more evenly over the year...

In a rambling post last year, I suggested that we use could Form 3115 to move three-fourths of our individual clients to a fiscal year... thereby staggering our work throughout the calendar year.

The post was satirical in nature. Most clients wouldn't go for it, and putting wage-earners on a fiscal year would have all kinds of unintended consequences.

But I still think it would be kinda cool...

BMK

Me protest - You thinks too much.

[RLymanC]

Extenion

Would an extension be necessary if no balance due, I believe they could just delay filing without the extension.

[thomtax]

Would an extension be necessary if no balance due, I believe they could just delay filing without the extension.

Ahh Yes. But then you could not show them just how much service your are giving to them.

LT

[JohnH]

Would an extension be necessary if no balance due, I believe they could just delay filing without the extension.

I always file extensions, even if there's a refund due (no matter how large). One never knows what sort of surprises can pop up down the road when it's too late to do anything about it. A valid extension covers all sorts of sins.

[Koss]

Be careful...

RLymanC wrote:

Would an extension be necessary if no balance due, I believe they could just delay filing without the extension.

I would never advise a client to delay filing without an extension.

They might have a balance due on their state tax return. Most states honor a federal extension; a few states don't. Either way, an extension of some sort might be needed for the state.

Failure to timely file without an extension could also have other consequences, such as defaulting on an installment agreement, or losing an opportunity to make an important election.

Finally: Filing late without an extension could be a real problem if the client ever decided to become an ERO. That's probably a little far-fetched. But it could conceivably cause problems for other types of professionals. Don't forget that attorneys are also governed by Circular 230. And under the current regulatory climate, I think anyone with a securities or insurance license had better file on time or get an extension.

And anyone even remotely contemplating running for public office, or seeking an appointed position, even for something as mundane as a small town mayor, or the board of trustees at a private university... well, you get my point. They don't want to have to admit down the road that they failed to file on time.

BMK