Thursday, January 14, 2010

2009 Tax Law Changes Highlighted

With each New Year come changes to the current tax laws.  Here are some of them.  Its important to learn if any of this year's changes apply to you.  So whats new?
1. First-Time Homebuyer Credit Extended to April 30, 2010.  Taxpayer's purchase of a qualifying home from Nov. 30, 2009 to April 30, 2010 equals to a maximum credit of $8,000 for a first-time homebuyer. 
2. There is good news for those taxpayers that already owned a home.  The new law provides a "long-time resident" credit of up to $6,500 to others who don't qualify as "first-time homebuyers".  To qualify, a buyer must have owned and used the same home as a primary residence for at least five consecutive years of the eight year period ending on the date of purchase of a new home as a primary residence.
3.Unemployment Compensation.  For any tax year beginning in 2009, each recipient of unemployment compensation can exclude from gross income up to $2,400 of the amount received druing the year.
4. Residential Energy Credits.  The nonbusiness energy property credit has been reinstated this year.  You may be able to claim up to $1,500 related to the cost of certain engergy-efficient property or improvements you placed in service in 2009.
5. Hope and Lifetime Learning Credits.  For tax year 2009 and 2010, there is a new education credit call the American opportunity tax credit, which is a modification of the Hope credit.  The maximum credit is $2,500 per student and it phases out between $80,000 and $90,000 adjusted gross income for a single individual.  The credit can be claimed for the first four years of post-secondary education.  Up to $1,000 of this credit is totally refundable, which means that you can receive a refund even if you owe no taxes.
6. Deduction for Sales Taxes imposed on purchase of New Motor Vehicles.  In 2009, you can deduct the state and local sales and excise taxes imposed on athe purchase of a qualified motor vehicle, the original use of which begins with tht purchaser.  The amount of the deduction is limited and is subject to a phaseout.  The deduction can be used to increase the amount of your standard deduction or you can take it as an itemized deduction.
7. Economic Recovery Payments.  Any economic recovery payment you recieve during 2009 is not taxable.  The payment is $250 per taxpayer.  If you meet the requirements and are entitled to a payment, you will receive it automatically.  You dont need to apply for it.

Here we have outlined just some of the changes, and there are MANY this year.  They range from higher standard deductions to real estate tax deductio for non-itemizers to new mileage rates to new rules for Roth IRA conversions...

We are on top of the changes.  So, if you have any questions, contact us.  As always, stay tuned!