Happy Holidays
Posted on January 4, 2010
The tax season is quickly approaching and there are many changes in the laws for this year. Some of these changes have been advertised such as the first time home buyer’s tax credit which was also extended to those who currently owned a home but wanted to buy and move into a different home. If you have bought a new home, then you want to check with your realtor and I am sure that they can provide the information that you need to know.
There are also some other deductions and credits that you may or may not know:
1) State and local sales taxes on the purchase of a new motor vehicle may be deducted if the purchase of the vehicle is made between February 16, 2009 and December 31, 2009. There is a limit of $49,500.
2) In the area of education, the HOPE scholarship was enhanced and was renamed the American Opportunity Tax Credit or AOTC. This increased the amount of the credit and also the life of the credit.
3) COBRA assistance was also implemented to help those who were terminated from their employment between September 1, 2008 and December 31, 2009.
4) The unemployment benefits exclusion for the first $2,400 of unemployment benefits is not taxable. This is only available in 2009.
5) Energy tax incentives offer the taxpayer credit up to 30% for installing insulation, exterior windows and doors, and heating and air conditioning systems for qualified improvements. There is a limit of $1,500.
6) Income from Foreclosures and Short Sales of homes can be excluded if certain conditions can be met. (Forgiveness of debt is an expense to the creditor and income to the debtor.)
This list is not a complete list and in further blogs I will provide you with highlights of some of the other changes. You need to contact us for the details of each of these and others that might affect you.
Next time we will talk about businesses and more about cancellation of indebtedness. Until then, please have a great and very safe Holiday Season.
Paul
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