Highlights of 2009 tax law changes may reduce your tax bill
1st Time Homebuyer Credit
If you (and spouse if married) bought your first home in 2009 please bring the HUD home closing statement with your income tax information. The new credit applies to anyone who has not owned a home in the United States in the last 3 years, and is available for homes purchased between January 1, 2009 and November 30, 2009. Another provision enacted in the November 7 extends the tax credit to homes purchased between November 7, 2009 and April 30, 2010.
New Cars or Trucks
Several special new tax deductions and credits are available this year if you bought a brand new car or light truck during the year. If you bought a new car please bring us a copy of the invoice so that you get this special item or deduction
Mortgage Interest
Recent IRS scrutiny of home mortgage interest deductions now require us to carefully track re-financings and the use of loan proceeds. Please provide us with any new home loan information, closing statements from any re-financings, and a summary of what any additional loan proceeds were used for.
Charity
ALL deductions of any amount must have a receipt. Any individual contribution over $250 must also have an acknowledgement letter from the charity, and the letter must be dated by the date we file your return. The letter should show the date and amount of any individual contribution over $250, and should also state that no goods or services were received in return for the contribution.
Property Tax
There is a special property tax deduction available in 2009 for property tax paid on your personal residence. Even though we have not needed this amount in previous years for some people, everyone should provide us with this amount this year, if you paid any property tax in 2009.
Foreign Accounts
If you have read any news in the last year you know that the IRS is looking closely for offshore accounts. If you have an account with over $10,000 in a foreign country, or a foreign business ownership (not through a mutual fund) please let us know as some special rules will apply to you.
Mileage Deductions
Deductible mileage rates changed during the year. Please provide us with the number of medical miles you drove during the year for this deduction. This includes trips to the doctor, dentist, pharmacy, dialysis, etc.
Education Credits
A major revision of college credits by President Obama has provided us with the new “American Opportunity Credit”, a special credit for undergraduate college students. If you have children in college or near to college, please discuss some options with us to assure that you receive the best benefit for these costs.
Roth IRA Conversions
You will be hearing from lots of “experts” this year that you need to convert your retirement accounts to Roth IRAs. While there are a number of advantages to conversions, there are an equal number of disadvantages that carry some major tax consequences. Please do not convert your accounts in 2010 without coming in to see us for an appointment to discuss both the positives and negatives.
Gift Changes
Effective 1/1/2009 the amount you may give to one person in one year without any return filing requirements has been increased to $13,000.
Energy Credits
The residential energy credit has been reinstated starting in January of 2009. If you added or are considering adding storm windows, doors, insulation or a furnace, the Federal credit is 30% of the cost of the product, plus installation fees for furnaces, up to a maximum of $1,500 for your home. There are also tremendous credits available for solar power, geothermal and wind energy that you should discuss with us if you are considering these changes. There is still a special tax credit for some new hybrid cars bought in 2009, so please bring that information to us as well.
If you (and spouse if married) bought your first home in 2009 please bring the HUD home closing statement with your income tax information. The new credit applies to anyone who has not owned a home in the United States in the last 3 years, and is available for homes purchased between January 1, 2009 and November 30, 2009. Another provision enacted in the November 7 extends the tax credit to homes purchased between November 7, 2009 and April 30, 2010.
New Cars or Trucks
Several special new tax deductions and credits are available this year if you bought a brand new car or light truck during the year. If you bought a new car please bring us a copy of the invoice so that you get this special item or deduction
Mortgage Interest
Recent IRS scrutiny of home mortgage interest deductions now require us to carefully track re-financings and the use of loan proceeds. Please provide us with any new home loan information, closing statements from any re-financings, and a summary of what any additional loan proceeds were used for.
Charity
ALL deductions of any amount must have a receipt. Any individual contribution over $250 must also have an acknowledgement letter from the charity, and the letter must be dated by the date we file your return. The letter should show the date and amount of any individual contribution over $250, and should also state that no goods or services were received in return for the contribution.
Property Tax
There is a special property tax deduction available in 2009 for property tax paid on your personal residence. Even though we have not needed this amount in previous years for some people, everyone should provide us with this amount this year, if you paid any property tax in 2009.
Foreign Accounts
If you have read any news in the last year you know that the IRS is looking closely for offshore accounts. If you have an account with over $10,000 in a foreign country, or a foreign business ownership (not through a mutual fund) please let us know as some special rules will apply to you.
Mileage Deductions
Deductible mileage rates changed during the year. Please provide us with the number of medical miles you drove during the year for this deduction. This includes trips to the doctor, dentist, pharmacy, dialysis, etc.
Education Credits
A major revision of college credits by President Obama has provided us with the new “American Opportunity Credit”, a special credit for undergraduate college students. If you have children in college or near to college, please discuss some options with us to assure that you receive the best benefit for these costs.
Roth IRA Conversions
You will be hearing from lots of “experts” this year that you need to convert your retirement accounts to Roth IRAs. While there are a number of advantages to conversions, there are an equal number of disadvantages that carry some major tax consequences. Please do not convert your accounts in 2010 without coming in to see us for an appointment to discuss both the positives and negatives.
Gift Changes
Effective 1/1/2009 the amount you may give to one person in one year without any return filing requirements has been increased to $13,000.
Energy Credits
The residential energy credit has been reinstated starting in January of 2009. If you added or are considering adding storm windows, doors, insulation or a furnace, the Federal credit is 30% of the cost of the product, plus installation fees for furnaces, up to a maximum of $1,500 for your home. There are also tremendous credits available for solar power, geothermal and wind energy that you should discuss with us if you are considering these changes. There is still a special tax credit for some new hybrid cars bought in 2009, so please bring that information to us as well.
posted by Huang Kan and Co. LLP CPAs at
10:02 AM
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