Please contact us with questions or if you need additional information on the items listed below.

Wednesday, June 24, 2009

FIRST TIME HOME BUYERS CREDIT HAS BEEN IMPROVED

For primary home purchased this year before 12/1/09, the maximum credit increases to $8,000, and it needn't be paid back.  The 15-year repayment rule still applies to residences bought in 2008, however.  Folks who buy homes in 2009 can elect to claim the credit on their 2008 returns by filing an amended return.  The credit will be recaptured if the home is sold within three years of being purchased.

TAX CREDIT FOR COLLEGE TUITION IS INCREASED FOR 2009 AND 2010

The Hope credit is replaced by a new credit of up to $2,500 per student a year for four years of college, not just the first two.  It now also cov ers the cost of books and begins to phase out at a much high level of AGI.

BUYERS OF NEW VEHICLES CAN DEDUCT THE SALES TAX PAID ON THE PURCHASE EVEN IF THEY DO NOT CLAIM SALES TAX AS AN ITEMIZED DEDUCTION.

This break applies to new cars, motor homes, light trucks and motorcycles purchases after 2/16/09 and before 1/01/10.

CREDIT FOR ENERGY EFFICIENT HOME IMPROVEMENTS IS LARGER FOR 2009 AND 2010.

THE FIRST $2,400 OF UNEMPLOYMENT BENEFITS RECEIVED IN 2009 IS TAX FREE

BUSINESSES RECEIVE SEVERAL BREAKS IN THE STIMULUS LAW:

50% BONUS FIRST YEAR DEPRECIATION IS RETAINED FOR ASSETS BOUGHT THIS YEAR

$250,000 CEILING ON EXPENSING ASSETS HAS BEEN RETAINED

SMALL BUSINESSES ($15,000,000 OR LESS) CAN CARRY BACK 2008 LOSSES FOR FIVE TAX YEARS INSTEAD OF TWO

Friday, January 2, 2009

2009 Tax Year:

MILEAGE RATES

The 2009 mileage rates are:

            Business - $0.55 per mile

            Medical/Moving - $0.24 per mile

            Charity - $0.14 per mile

RETIREMENT PLAN AND IRA PAYOUTS

If you are 70 1/2 or older you can skip taking payouts from retirement plans and IRAs in 2009 without a penalty.

FEDERAL ESTATE TAX EXEMPTION

The federal estate tax exemption increases to $3,500,000 in 2009

ANNUAL GIFT TAX EXCLUSION

The annual gift tax exclusion per donee is increased to $13,000 in 2009

2008 Tax Filings:

50% BONUS DEPRECIATION ON PURCHASE OF NEW EQUIPMENT PURCHASED IN 2008. 

UP TO $250,000 EXPENSING OF EQUIPMENT PURCHASES IN 2008

Wednesday, August 18, 2008

NEW SUBSTANTIATION REQUIREMENTS FOR CHARITABLE CONTRIBUTIONS

Cash contributions have become tougher to deduct.  Now, you can only deduct monetary contributions if you have a cancelled check, credit card or other written ackowledgement from the charity.  Cash contributions backed by only your written contribution log are not deductible.  Contributions of clothing or household items with a charitable value of $500 or greater must be backed with an appraisal or the IRS will not allow the deduction.

NEW TAX RELIEF FOR TAXPAYERS WITH FORECLOSURE OF PRINCIPAL RESIDENCE

Congress has provided some relief for taxpayers caught up in the lending crisis.  You do not have to pay federal income tax on up to $2 million of debt forgiven for a mortgage secured by your principal residence.  Previously, forgiven debt generally resulted in income for the borrower equal to the amount of debt forgiven.

PLANNING FOR 2008 - 2010 ZERO PERCENT ADJUSTED NET CAPITAL GAIN RATE (ANCG)

If your adjusted net taxable gains (ANCG) are in the 10 - 15% tax bracket, your tax rate may be 0% for 2008 - 2010.

Potential beneficiaries include retirees, prospective retirees, some semiretirees, and parents and children.  With proper planning, these taxpayers could generate income and implement various asset management strategies at no tax cost.