Tax Tips for the 2009 Season
Earned Income Tax Credit (EITC) - Taxpayers are now allowed to claim Earned Income Credit on three qualifying children in 2009. In previous years, taxpayers could claim only two children for EITC purposes.
Earned Income Tax Credit (EITC) - Married taxpayers filing a joint return qualifying for EITC with three qualifying children may claim up to $5,657 in Earned Income Credit in 2009.
E-File Your Return - Taxpayers who e-file their return and request a direct deposit typically receive their refunds 2-3 weeks quicker than paper filers.
First-Time Homebuyers Tax Credit - First-time homebuyers may claim 10% of the purchase price of a home provided a binding contract has been entered before May 1, 2010 and closes before July 1, 2010. The maximum credit is $8,000 and does not have to be repaid if the taxpayers live in the home for 3 years. Purchases after Nov. 6, 2009 require taxpayers to attach a copy of properly-executed settlement statement to their return.
Long-Time Resident Homebuyers Tax Credit - Taxpayers who have maintained the same principal residence for 5 of the 8 previous years can qualify for up to $6,500 on the purchase of a subsequent principal residence.
Hope Education Credit Expanded - The Hope Credit has been expanded to cover the first four years of postsecondary education. Course materials, including books and computers are qualified expenses.
Residential Energy Credit - Claim up to 30% ($1,500) of the purchase price for Energy Efficient Improvements to your home. Eligible property includes items such as insulation, exterior windows and doors, coated metal roofs, heat pumps, and water heaters. Manufacturer certification is required.
Unemployment Benefits (New for 2009) - The first $2,400 in unemployment benefits received by an individual is not subject to federal income tax.
Student Loan Interest - Taxpayers may be able to deduct up to $2,500 in student loan interest paid in 2009 without itemizing.
Standard Mileage Rates - The standard mileage allowance for 2009 is 55 cents per mile for business, 14 cents per mile for charitable purposes, and 24 cents per mile for medical and moving expenses. Taxpayers should have mileage logs or other documentation to substantiate their claims.
Sales Tax Paid on New Vehicle - Taxpayers may increase their standard deduction or itemized deduction by the amount paid in sales/excise tax on up to $49,500 for the purchase of a vehicle. The vehice has to be new and purchased after February 16, 2009. Income limits apply.
Estimated Tax Payments - First quarter estimated tax payments are due on April 15. Payments can be made on-line, by phone, mail, or using deposit coupons at your bank. Estimated payments are also due on 6/15; 9/15; and 1/15.
IRA - Reduce or defer your tax liability by contributing to an IRA. Taxpayers may make annual contributions of $5,000 ($6,000 if 50 years old or older) and reduce their taxable income by the amount of their contribution. Many taxpayers already covered by a retirement plan at work also qualify.
