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First-Time
Homebuyer Credit |
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For people
who purchased a first-time home (meaning you were not a homeowner for the
past three years from the date of purchase) you will get a refundable tax
credit equal to 10% of the purchase price of the home not to exceed $8000
for homes purchased from 1/1/09 through 4/30/2010. If you have signed a
binding contract before 5/1/2010 and settle on the home prior to 7/1/2010
you will also qualify for the credit. Make sure you live in the home for
at least 36 months; otherwise you may have to repay the credit.. |
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Long-Time
Homeowners Credit |
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If you have
owned a principal residence for at least 5 consecutive years out of 8 ending
on the date of the purchase of a new principal residence you can receive
a maximum credit of $6500. for homes purchased between 11/7/09 through
4/30/2010. You must attach a copy of your settlement sheet to your tax
return to receive the credit. Some restrictions apply including; you have
to be 18 years or older and not be claimed as a dependent; the purchase
price cannot exceed $800,000; income limitations apply. |
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Lifetime
Learning Credit |
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This credit
is for students taking non-degree courses for undergraduate, graduate,
professional degree students, and students acquiring or improving job skills.
The credit amount is a maximum $2000 per household (not per student) or
20% of tuition expenses on a maximum of $10,000 of qualified tuition and
fees paid. The student does not need to be full time nor take a minimum
number of courses. |
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American
Opportunity Credit |
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For 2009 and
2010 students will be eligible for a credit of up to $2500 per student
for the first four years of the student’s post secondary education. Eligible
Institutions include any accredited college, university, vocational school
or other accredited post-secondary education institution. Eligible expenses
include tuition, equipment and course materials paid to the educational
institution. Room and Board, other living expenses, insurance, medical
expenses and transportation expenses DO NOT qualify. Income limits apply. |
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Making
Work Credit |
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New for 2009
and continuing into 2010, individuals not claimed as a dependent can claim
a refundable credit equal to the lesser of $400 ($800 for married) or 6.2%
of earned income. If you weren’t paying attention to your take home pay,
you may not have noticed that you received an increase in your pay…effectively
giving you the Make Work Credit ahead of time in your weekly check; so
you may not actually see an extra $400 or $800 in your refund at the end
of the year. |
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Penalty
for Failure to File Partnership or S-Corporation Returns |
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Even though
Partnerships and S-Corporations pay no Federal Taxes you must still file
a timely return. S-corporations are due on March 15th and Partnerships
are due April 15th. The penalty is $195 times the number of shareholders
or partners, times the number of months the return is late. Make sure you
prepare your returns by the deadline or file an extension. |
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2009 and
2010 Updates |
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Business Standard
Mileage 2009 = 55 cents/mile, 2010 = 50 cents/mile Charity Work Mileage
Rate 2009 = 14 cents/mile, 2010 = 14 cents/mile Medicaland Moving Mileage
Rate 2009 = 24 cents/mile, 2010 = 16.5 cents/mile Section 179 Depreciation
Deduction 2009 = $250,000, 2010 = $134,000 Maximum Earnings subject to
Social Security Tax 2009 = 106,800, 2010 = 106,800 |
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2010 W-4
and New Withholding Tables |
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Each year
the IRS issues withholding tax tables to employers. This year, the IRS
tables reflect higher withholding amounts than usual. You may have noticed
less in your paycheck. If you noticed a difference in your withholding
you can change your W-4 to give you the money back in your weekly pay by
claiming more deductions. Bring your latest pay stub and your current filing
status (i.e. Married 1, Single 0, etc…) when you have your taxes done;
we’ll help you figure out what to claim. |
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Nonbusiness
Energy Property Credit |
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You can take
a tax credit equal to 30% of eligible energy savings improvements, up to
a maximum of $1500 for the combined 2009 and 2010 tax years. Improvements
include certain high-efficiency heating and air conditioning, water heaters
and stoves that burn biomass all qualify with installation fees. Energy-efficient
windows, skylights and doors, qualifying insulation and certain roofs also
qualify, excluding installation costs. |
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Residential
Energy Efficient Property Credit |
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Homeowners
that install qualifying property such as solar electric systems, solar
hot water heaters, geothermal heat pumps, wind turbines and fuel cell property
with labor charges will receive a credit equal to 30% of the costs incurred
with no cap on credit. Not all energy efficient property qualifies and
only certain Energy Star labeled property qualifies. Check the manufacturers
certification at their website for qualifying equipment, keep a copy of
the certification with your records when verified. |
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Gift Tax |
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The annual
gift tax exclusion for 2010 remains at $13,000 per recipient. If you exceed
that amount you will have to file and possible pay gift tax. Here is an
example of how it works: if you are married and have two children, you
are allowed to give each child $26,000 before you would have to file gift
tax, you can give each child $13,000 and your spouse can give each child
$13,000. You and not your children pay the tax; the gift is not taxable
to your children and it is not deductible by you. |
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Federal
Inheritance Tax for 2010 Repealed |
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Currently
there is no Federal Inheritance tax on a decedents estate beginning January
1, 2010 until December 31, 2010. Congress could always take action to retroactively
tax estates for 2010. For 2009, there was a federal tax exemption of 3.5
million; for 2011 the tax exemption was to return to the pre 2001 Act amount
of 1 million. The exemption is typically used over the decedents lifetime
when gifts are made. The gift tax exclusion used each year is deducted
from the federal tax exemption amount. |
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2009 and
2010 Retirement Contribution Amounts |
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IRA contribution
limits: Under Age 50 $5000, Over Age 50 $6000 SIMPLE IRA’S elective deferral
limits: Under Age 50 $11,500, Over Age 50 $14,000 401(k) elective deferral
limits: Under Age 50 $16,500, Over Age 50 $22,000 Profit-sharing plans
and SEP IRA’s: Contribution limit: $49,000 Compensation limit (for contributions)
$245,000 Maximum contribution percentage (Self-employed/Employer) 20 /
25% |
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ROTH IRA
Conversions |
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For 2010 and
later, you can convert your traditional IRA to a Roth IRA regardless of
how much income you make. When you convert the IRA you will have to pay
taxes on the amount converted, so that when you make qualifying withdrawals
from your Roth IRA the earnings will be tax-free. You will have the option
when to pay the tax; you can either pay half the tax in 2011 and the other
half in 2012, or you can select to pay all of the tax in 2010. |
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Bicycle
Commuters Fringe Benefit Credit |
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Check with
your Employer to see if they offer any type of commuter refunds. Some employers
will reimburse Transit Passes, Parking and Van Pools; the amount allowed
for 2010 is $230/month tax deductible for the employer and tax free to
the employee. Starting 3/1/09 through 12/31/10, your employer can reimburse
$20/month if you commute on a regular basis to work via bicycle; to cover
costs of repairs, maintenance and purchase of your bike. |
Call
to schedule an appointment.
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