I'm sure your all a-tingle to meet with your accountant, who is up there in importance with with the Doctor, the Lawyer and the Spouse. I just want to give you a few tips that many people neglect take advantage of. Accountants, of which I was one, usually ask the right questions, but sometimes they may not be aware of some of your activities that if documented properly, could be tax-advantageous transactions. To be clear, you should be divulging all financial details to the accountant, just as you would provide information to the aforementioned Doctor, Lawyer or Spouse.
I'd like to touch upon just few that are advantageous to you.
1. Tax Credit of up to $8,000 for First-Time Homebuyers and $6,500 for Existing homeowners;
The Congress extended and expanded the wildly popular 2008 first-time homebuyer tax credit. In addition, the income limits were increased, making even more people eligible. If your single, you can claim a credit even if your income is above $ 125,000. You can earn a maximum of $ 145,000 and still receive a partial credit. Married couples qualify for full credit with income up to $ 225,000, and partial credit if income exceeds
$ 225K up to $ 245K. By the way, this is a refundable credit, meaning it reduces your tax liability, and could lead to a refund if you owe less than the credit!
You can qualify for this credit even if you are an existing home owner. If you buy another home, and the new home becomes your primary residence, you don't need to sell the existing home and you are still eligible to receive a tax credit of 10% of the purchase price up to $6,500 if you bought and closed on a replacement home by September 30, 2010. In order to be eligible for the credit, you must have lived in the same principal residence for any five-consecutive-year period during the past eight years.
First time homebuyers who closed on their principal residence on or before Sept 20,2010 will qualify for a tax credit of 10% of the purchase price up to $ 8000. However, if you owed a home in the previous 3 years, you are not eligible for a credit.
2. Income Phaseouts for Itemized Deductions and Personal Exemptions for High-Income Taxpayers;
The amount of itemized deductions and personal exemptions you can take are normally phased out as your income rises. In 2010, however, those income limits have been repealed. This is good news for all of you who have large deductions from home mortgage interest, real estate taxes, medical bills, which are the deductions that typically the largest on most returns. Be sure to tell your accountant if you paid points on your mortgage, or if you paid mortgage insurance premiums when you financed. I have seen many home owners fail to tell me that they paid points on a mortgage. So, no matter when you took out that loan, check your closing documents to see if you did, and let the accountant know.
3. Tax Credit for College Tuition
For 2010 through 2012, the Hope credit is replaced by a new credit. Now called the American Opportunity Tax Credit, it provides a credit of up to $2,500 per student per year for four years of college. It now also covers the cost of books, and begins to phase out at $80,000 of Adjusted Gross Income for single filers and $160,000 for joint filers. If the credit is more than your income tax liability, 40 percent of it is refundable. Also, the full credit is allowed against the Alternative Minimum Tax.
4. Child Tax Credit
If the credit exceeds your tax liability, all or part of the credit will be refunded if the you earn more than $3,000 in 2010, down from $12,550 in earnings previously.
5. Credit for Energy-Saving Home Improvements
If you paid for energy-saving home improvements the tax credit for the cost of these improvments is 30 percent for 2010, up to a combined maximum of $1,500 in both 2009 and 2010. It applies to qualified insulation, windows, outside doors, biomass fuel stoves and high-efficiency furnaces, water heaters and central air conditioners.
One last point about filing. Congress passed legislation in December 2010 (best time to do that). Due to the lateness of the enactment of the tax bill, the IRS delayed the start of processing for some returns until Feb.14. Many preparers and software companies have been holding returns for submission. The expected increase in volumes may result in some taxpayers experiencing a delay in receipt of e-file acknowledgements and, in some instances, slight refund delays. Taxpayers can check the status of their refund on "Where’s My Refund?" on IRS.gov.
I'd like to touch upon just few that are advantageous to you.
1. Tax Credit of up to $8,000 for First-Time Homebuyers and $6,500 for Existing homeowners;
The Congress extended and expanded the wildly popular 2008 first-time homebuyer tax credit. In addition, the income limits were increased, making even more people eligible. If your single, you can claim a credit even if your income is above $ 125,000. You can earn a maximum of $ 145,000 and still receive a partial credit. Married couples qualify for full credit with income up to $ 225,000, and partial credit if income exceeds
$ 225K up to $ 245K. By the way, this is a refundable credit, meaning it reduces your tax liability, and could lead to a refund if you owe less than the credit!
You can qualify for this credit even if you are an existing home owner. If you buy another home, and the new home becomes your primary residence, you don't need to sell the existing home and you are still eligible to receive a tax credit of 10% of the purchase price up to $6,500 if you bought and closed on a replacement home by September 30, 2010. In order to be eligible for the credit, you must have lived in the same principal residence for any five-consecutive-year period during the past eight years.
First time homebuyers who closed on their principal residence on or before Sept 20,2010 will qualify for a tax credit of 10% of the purchase price up to $ 8000. However, if you owed a home in the previous 3 years, you are not eligible for a credit.
2. Income Phaseouts for Itemized Deductions and Personal Exemptions for High-Income Taxpayers;
The amount of itemized deductions and personal exemptions you can take are normally phased out as your income rises. In 2010, however, those income limits have been repealed. This is good news for all of you who have large deductions from home mortgage interest, real estate taxes, medical bills, which are the deductions that typically the largest on most returns. Be sure to tell your accountant if you paid points on your mortgage, or if you paid mortgage insurance premiums when you financed. I have seen many home owners fail to tell me that they paid points on a mortgage. So, no matter when you took out that loan, check your closing documents to see if you did, and let the accountant know.
3. Tax Credit for College Tuition
For 2010 through 2012, the Hope credit is replaced by a new credit. Now called the American Opportunity Tax Credit, it provides a credit of up to $2,500 per student per year for four years of college. It now also covers the cost of books, and begins to phase out at $80,000 of Adjusted Gross Income for single filers and $160,000 for joint filers. If the credit is more than your income tax liability, 40 percent of it is refundable. Also, the full credit is allowed against the Alternative Minimum Tax.
4. Child Tax Credit
If the credit exceeds your tax liability, all or part of the credit will be refunded if the you earn more than $3,000 in 2010, down from $12,550 in earnings previously.
5. Credit for Energy-Saving Home Improvements
If you paid for energy-saving home improvements the tax credit for the cost of these improvments is 30 percent for 2010, up to a combined maximum of $1,500 in both 2009 and 2010. It applies to qualified insulation, windows, outside doors, biomass fuel stoves and high-efficiency furnaces, water heaters and central air conditioners.
One last point about filing. Congress passed legislation in December 2010 (best time to do that). Due to the lateness of the enactment of the tax bill, the IRS delayed the start of processing for some returns until Feb.14. Many preparers and software companies have been holding returns for submission. The expected increase in volumes may result in some taxpayers experiencing a delay in receipt of e-file acknowledgements and, in some instances, slight refund delays. Taxpayers can check the status of their refund on "Where’s My Refund?" on IRS.gov.
No comments:
Post a Comment