Hundreds get tax advice from CPAs staffing annual Star-Telegram hot line

Callers to the Star-Telegram's annual tax hot line Sunday peppered 20 certified public accountants with questions ranging from how to handle unemployment benefits to claiming the new education credits.

"Last year, it was all Barnett Shale," said Karen Senecal, a CPA who staffed last year's hot line and Sunday's. This year, "it was all random."

The four-hour phone bank, co-sponsored by the Fort Worth Chapter of the Texas Society of CPAs, took more than 450 calls.

More popular questions concerned filing status, new education credits, deductible medical expenses, residential energy credits, sales tax and property tax deductions, and how to report income and losses from investments.

"I think people understand there are a lot of changes going on," said Lacey Riley, a Flower Mound CPA.

Some of the calls reflected the times.

One of Riley's callers wanted to know more about the new American Opportunity education credit, the former Hope Credit. The woman and her husband, who lost his job, can take advantage of the credit for the first time because their income dropped.

The American Opportunity credit changes the Hope Credit for the 2009 and 2010 tax years, making it available to more taxpayers, including many with higher incomes and those who owe no tax, according to the Internal Revenue Service.

Eligible taxpayers can claim a credit of up to $2,500 of the cost of qualified tuition and related expenses paid during the taxable year, a $700 increase from the Hope credit, the IRS says.

Doug McDougal, a CPA with Lane Gorman Trubitt, says he had to correct a few callers who thought they couldn't claim the education credit because they had borrowed the money to pay for the education costs.

"They can still take the credit," McDougal said.

Some callers bought a new car in 2009 and wanted to know how to take advantage of the sales tax deduction. The answer: Filers who don't itemize can take the sales tax as an addition to their standard deduction by using Schedule L.

Some seniors wanted to know the rules for required minimum distributions from retirement accounts for the 2010 tax year, said McDougal and Cyndy Kimberling, a CPA with Kimberling, McFarland and Associates in Fort Worth. Seniors ages 701/2 or above are required to take a percentage from their retirement plans each year.

Congress and the president waived required minimum distributions in 2009, but they haven't done that for 2010.

Seniors who are the right age "have to take a distribution by Dec. 31," Kemberling said.

Some of the questions went beyond what could be dealt with in a phone call. One of Senecal's callers wanted to know whether his new company would best be organized as a corporation.

"That's beyond our scope," said Senecal, who advised the man to call a financial planner.

One of McDougal's callers hadn't filed a tax return since 2004 because a spouse had died and other difficulties had set in. The caller wanted to know whether she should hire a CPA.

"I said yes, because for a long period of time, you can go through voluntary disclosure" without fear of criminal penalty, McDougal said. "And chances are, you're not going to owe any money anyway."

Scott Nishimura, 817-390-7808