Friday, October 30, 2009, 06:30 AM -
NewsPosted by Editor
Mike Gillespie files a great story this month in the Journal regarding tax tips for businesses. For everyone who doesn't own a business, here are some for you.
First-Time Homebuyer CreditIf you didn't own a principal residence during the past 3 years and purchase a home before Dec. 1, you can receive a credit of up to $8,000 on either an original or amended 2008 tax return, or a 2009 return. The IRS has more information at
http://www.irs.gov/newsroom/article/0,, ... 71,00.htmlSpecial Sales Tax Deduction for Car PurchasesWith 2010 models arriving in dealer showrooms, don't forget that purchasing a new car, light truck, motor home or motorcycle could qualify you for a special deduction for the state and local sales and excise taxes on your 2009 tax returns if made before Jan. 1, 2010. The deduction is limited to the sales and excise taxes and similar fees paid on up to $49,500 of the purchase price of a new vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify. More online at
http://www.irs.gov.
Energy-Efficient Home ImprovementsThe Recovery Act also encourages taxpayers to make their homes more energy efficient. The law increases the rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to a total of $1,500 for improvements.
This credit equals 30 percent of what a homeowner spends on eligible energy-saving improvements, up to a maximum tax credit of $1,500 for the combined 2009 and 2010 tax years. The cost of certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass all qualify, along with labor costs for installing these items. In addition, the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs also qualify for the credit, though the cost of installing these items does not count.
By spending as little as $5,000 before the end of the year on eligible energy-saving improvements, a homeowner can save as much as $1,500 on his or her 2009 federal income tax return. Due to limits based on tax liability, other credits claimed by a particular taxpayer and other factors, actual tax savings will vary. These tax savings are on top of any energy savings that may result.
Credit for First Four Years of CollegeThe new credit modifies the existing Hope credit for tax years 2009 & 2010, making it available to a broader range of taxpayers, including many with higher incomes and those who owe no tax.
1. This credit, which expands and renames the existing Hope Credit, can be claimed for qualified tuition and related expenses that you pay for higher education in 2009 and 2010. Qualified tuition and related expenses include tuition, related fees, books and other required course Materials.
2. The credit is equal to 100 percent of the first $2,000 spent and 25 percent of the next $2,000 per student each year. Therefore, the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualifying expenses for an eligible student.
3. The full credit is generally available to eligible taxpayers who make less than $80,000 or $160,000 for married couples filing a joint return. The credit is gradually reduced, however, for taxpayers with incomes above these levels.
4. Forty percent of the credit is refundable, so even those who owe no tax can get up to $1,000 of the credit for each eligible student as cash back.
5. The credit can be claimed for qualified expenses paid for any of the first four years of post-secondary education.
6. You cannot claim the tuition and fees tax deduction in the same year that you claim the American Opportunity Tax Credit or the Lifetime Learning Credit. You must choose to either take the credit or the deduction, which ever is more beneficial for you.