You may claim a Lifetime Learning Credit for your own tuition and related expenses or for your spouse or your child tuition and related expenses. The credit is equal to 20% of the taxpayer’s expenses (not to exceed $10,000). Lifetime Learning Credit Eligibility Only one individual (qualifying student) in the family is eligible for this credit. This credit is calculated per family, not per child. Even if you claim more than one student in the family, the maximum tax credit of 20% of the expenses does not change. The maximum amount of the adjusted gross income, if you are single, is $80,000 or less. For married couples, filing joint return, the income limit is $160,000.

Hybrid Vehicles Credit Qualifications If you are the owner of a new qualifying hybrid vehicle, you can claim a tax credit between $400 and $2,400 based on fuel economy. You may be eligible for a conservation credit of up to $1,000 too! In order to qualify for this hybrid vehicles credit, you must have purchased the car beginning with January 2006. The hybrid vehicles credit is only available to the original purchaser. If the car is leased to a consumer, the leasing company can claim the credit. The Hybrid Vehicle Tax Credit Phases Out Sooner Than You Think Don’t hesitate to claim the hybrid vehicle credit for your qualifying car. The phase out occurs when the manufacturer sells more than 60,000 hybrid vehicles. The tax limit credit may be reduced. Furthermore, the owners of hybrid vehicles can only claim half the credit for the next two quarters and only 25 percent in the following 6 months after.

First time home buyers are eligible to receive a income tax home credit of 10% of the purchase price, under certain circumstances. Income Tax Home Credit Qualifications Your adjusted gross income must not exceed $75,000 or $150,000, if you file a joint return. If your financing comes from tax-exempt mortgage revenue bonds or if you are a non-resident alien, you cannot qualify for this  income tax home credit. $8,000 Nonrefundable Credit For A Qualified First Time Home Buyer If you are eligible, you are subject to receive a income tax home credit of up to $8,000. If you bought the home in 2009, you do not have to repay this amount back, unless you resell the home or the home ceases to be your main residence within three years after the purchase.

Tax Breaks Social Security Ideas If you had two or more employers in the same tax year, too much Social Security tax may be deducted from your income. You can get back the excess Social Security that has been withheld when you file your tax return. Calculating Your Social Security Tax When your Social Security tax is calculated, a fixed rate of 6,2 is applied to your income. For example, you have worked for two employers and earned $120,000 and $120,000, both of them will deduct the maximum OASDI (6,2 % X 120,000) from your wages. In accordance with the law, you are liable for only $7,440 and you are eligible to receive a refund on the other $ 7,440 that has been held. Claiming Credit For Overpaid Social Security Taxes? File Form 1040. You can claim the excess of your Social Security on line 69 of the form. Refunds For Excess Of Social Security Tax The excess Social Security tax will be refunded to you, even if you owe no taxes. Tax Breaks Social Security – We Can Help You, Contact Us Today!

Electric Vehicle Credit Eligibility You may be eligible to receive a refundable credit of 10% of the cost of a qualified electric vehicle placed in service after June 30, 1993 and before 2007. A qualifying vehicle must be powered primarily by an electric motor. Claiming The Electric Vehicle Credit The maximum credit is $4,000 per qualified vehicle. The taxpayer who claims an electric vehicle credit must be the first user of the car.

Disability Credits – Eligible Expenditures This tax credit allows employers to deduct the eligible expenditures related to business access costs for Americans with disabilities. Disability Credits For 50% Of Qualifying Expenditures The disability credits covers 50% of qualifying expenditures, including: Provisions for readers for customers and employees with disabilities. Provision for access to the Internet for those with disabilities. Purchase of adaptive equipment. Removal of architectural barriers in facilities and vehicles (the changes must comply with applicable accessibility standards), etc. The maximum annual disability credits allowed is $5,000. This credit is intended to cover costs only for adapting existing facilities. The new construction expenditures are not covered by the disability credits.

Tax Relief For Small Business – Do You Qualify? If you are a small business owner who earns less than $500,000 in 2008, and half of your adjusted gross income is from the business you own, you may be eligible for an estimated tax payment relief. In addition, your business must have less than 500 workers. The Estimated Tax Payments Are Reduced For 2009 The American Recovery and Reinvestment Act of 2009 reduced the estimated tax payments a small business owner must pay. Before this, the estimated tax payments were equal to 100% or more of the tax liability from the prior tax year. For 2009, your estimated tax payments are equal to 90% percent of your tax liability for 2008 or 2009. Normally, you have to pay 110% of your previous year’s taxes in estimated taxes. Still Need Help With Some Tax Relief For Small Business, Contact Us Today!

New Standard Deduction Changes Beginning with 2009, the amount of income tax you pay on your tax return may be lower. The new standard deduction (the amount that reduces your income tax) is $11,400 for married taxpayers who file jointly (up by $500 from 2008). For singles and married individuals who file separately, the new standard deduction is $5,700 (up to $250 from 2008). For heads of household is $8,350 in 2009, $350 more than the amount of the standard deduction allowed in 2008. In Addition To Your New Standard Deduction, You May Be Eligible For A Property Tax Deduction If you are married and file a joint return, you may be able to deduct up to $1,000 of property taxes you paid. For singles, the amount of real estate tax deductible is limited to $500.

Section 179 Expense Deduction For 2009, small business owners can claim deductions of up to $250,000 of expenses for qualifying equipment purchased and placed in service during the year. In 2008, the maximum amount of expense deduction was $125,000. The deduction starts to phase out if the annual investment in business equipment is more than $800,000. Contact Us If You Still Have Questions About Your Small Business Tax Break!

You may be able to claim the 2009 sales tax deductions for a new car purchased after February 16, 2009 and before January 1, 2010. You are eligible for this tax deduction even if you do not choose to itemize your deductions. When filing your tax return, add the sales tax you paid to your standard deduction. New Car Tax Deduction – Eligibility Criteria There are few qualification requirements you should meet, in order to get sales tax deduction when you purchase a new vehicle. This 2009 Sales Tax Deductions For A New Car, light trucks and motorcycles. The cost of a qualified vehicle subject to the sales tax deduction is limited to $49,500. The Adjusted Gross Income does not have to exceed $250,000 for married taxpayers and $125,000 for singles. There are states that they do not have a sales tax. In this case, you may be able to qualify for a deduction for other taxes you paid.  If you have questions about the 2009 sales tax deductions for a new car or any other question we may be able to help with, please contact us today.

Refundable Child Tax Credit – Qualifications And Eligibility For 2009, the child tax credit is refundable up to 15% of the amount you qualify for, if your earned income is at least $3,000. More taxpayers will be eligible for this credit, as the income threshold needed to qualify for child tax credit refund decreases from $8,500 in 2008. If you have three or more children and your earned income is less than $3,000, you may be subject to receive a partial refund (the amount by which your Social Security Taxes exceed your earned income credit). Child Tax Credit – Eligibility You may be eligible for a Child Tax Credit if you have a qualifying child under the age of 17. For each eligible child you can receive a tax credit equal to $1,000. The child tax credit is subject to phase out for taxpayers with adjusted gross income more than $110,000 per family, filing a joint return. The maximum amount of adjusted gross income for singles is $75,000. In order to determine the amount of credit you can claim you need to file a Form 1040 or Form 1040A. Need Help With Your Refundable Child Tax Credit, Contact Us Today!

Tax Credit For College Tuition Changes And Qualifications The American Opportunity Tax Credit replaced the Hope Scholarship Tax Credit. For 2009 and 2010, you can claim a credit of up to $2,500 of the cost of tuition and expenses paid during the taxable year, for four years of college. The old Hope Tax Credit was offered only for 2 years of college. Taxpayers with a higher income or those who do not owe taxes are now eligible for this new tax credit for college tuition. The phase out begins at $80,000 of adjusted gross income for individuals who file separately. For married taxpayers who file jointly, the income limit is $160,000. American Opportunity Tax Credit Is 40% Refundable If the amount of tax credit for college tuition you are eligible for exceeds your tax liability amount, 40% of the credit value is refundable. In addition, using this tax credit for college tuition, you may offset the alternative minimum tax you may owe.

Payroll Tax Credit – Qualifications And Eligibility Beginning with April 2009, working individuals and working families may receive the benefits of a new payroll tax credit of up to $400 for single wage earners and $800 for qualified married taxpayers. You may be eligible for a refundable payroll tax credit equal to 6.2% of your earned income, if your adjusted gross income is less than $75,000 for a single filer. If you file a joint return, your adjusted gross income phases out at $150,000. Your employer will calculate in advance, your income tax withholding and add extra money to your paycheck. This payroll tax credit can offset you tax liability, too. For 2009 and 2010, retired federal employees or individuals who do not have an earned income may receive a reduced credit of $250. Those who receive veteran disability or railroad retirement compensation benefits can also qualify for the $250 credit (if married and both persons are eligible, the credit offered is $500).

Kiddie Tax – New IRS Rules Beginning with 2009, the amount that exceeds $1.900 of unearned income will be taxed to the child at the parent’s tax rate. The amount of unearned income increased from $1,800 in 2008. The first $950 of your child’s unearned income is tax-free. The next $950 is taxed at your child’s tax bracket. New Age Requirements For Kiddie Tax This tax rate applies until the year the child is 19. For those who attend full time college and their unearned income is half of their support, the kiddie tax applies until they are 24 years old. The kiddie tax used to apply only to children under 14 years old.

Tax First Time Home Buyers – $6,500 Tax Credit For Existing Home Buyers Beginning with 2008, existing home buyers who purchase a new home as a replacement for their current residence may qualify for a tax first time home buyers credit equal to $6,500. In order to qualify for this tax first home buyers credit, you must purchase a new home before June 30, 2010. As the income limit has increased, you may be eligible for this tax credit. Your modified adjusted gross income must not exceed $125,000 or $225,000 if you file a joint return. If the purchase price of your home exceeds $800,000, you are not eligible for this tax credit. Tax Credit Of Up To $8,000 For First Time Home Buyers If you are a first time home buyer, you may qualify for a maximum amount of $8,000 tax credit. If you buy your first residence in 2009, no later than December 1st, you are eligible for 10% of up to $80,000 of the purchase price. You may offset your tax liability with this tax first time home buyer credit. If the amount of tax first time home buyers credit you are entitled to deduct exceeds the amount of income taxes you are liable for, you are eligible for a refund. However, if you are liable for alternative minimum tax, you cannot offset it using this tax credit. If you bought the home in 2009, you do not have to repay this amount back, unless you resell the home or the home ceases to be your main residence within three years after the purchase. Need Some Additional Help With The Tax First Time Home Buyers Get Credit For, Contact Us Now!

In 2009, the IRS allows a tax exclusion for an annual gift amount of $13,000 that you give to your spouse or to your child. For 2008, the gift tax exemption is $12,000. For married taxpayers who file a joint return the annual gift tax exemption is $26,000. Gift Tax Exemption Requirements If you give more than the annual gift exclusion, you have to pay taxes. However, there are other exclusions that may limit the gift tax you may be held liable for. Gift tax exemption may not apply for some of the gifts you offer to your spouse. If the spouse is not a U.S. citizen, certain limits may apply. In addition, there is an unlimited exclusion for payments made for medical or school expenses, if you pay these expenses directly to those institutions. If you give more than the annual tax exclusion amount, you have to file a gift tax return. You will be liable for tax gift only if you give a very large amount. The IRS allows you to give $1,000,000 during your lifetime without paying gift taxes. If the amount of gifts you give during your lifetime exceeds the limit above, the excess of it may reduce your estate tax. Need Additional Help With The Gift Tax Exemption, Contact Us Today!

Estate Tax Exemption Changes And Qualifications For 2009, the federal estate taxes apply only for estates larger than 3.5 million (up from 2 million in 2008). Most people would not be subject to pay a federal estate tax on their inherited property. There are few tax law exemptions and deductions that may leave you estate tax free. If the transfer of the estate was done in 2009, the personal exemption is 3.5 million. In other words, if your property value is less than 3.5 million you don’t owe any estate taxes. If your estate value is more than the amount excluded through the new estate tax exemption, you have to pay taxes on the excess. Your Tax Exemption May Be Reduced By Large Amounts Of Taxable Gifts You Made You have to take into consideration the amount of taxable gifts you report during the year. There is a limit amount of $1,000,000 for gifts you can give during your lifetime. If you report more than the limit imposed, this may affect your personal estate tax exemption. Your tax exemption may be reduced. Marital Deduction Applies Only For Property Left To Citizen Spouses All the property left to a surviving spouse is estate tax free. The marital deduction applies only for property left to spouses who are U.S. citizens. However, if the surviving spouse is not a citizen, she can still qualify for personal estate tax exemption. In addition, other deductions and exemptions include: certain charitable contributions, administration expenses, and claims against the estate. If you are subject to federal estate tax, call a tax negotiator in a timely manner. Knowing most of the exemptions and deductions you can qualify for, they will help you reduce your tax estate liability.

2009 Foreign Earned Income Tax Exclusion Qualifications If you are a U.S. citizen or a resident alien who works and earns income abroad, you may qualify for a the 2009 foreign earned income tax exclusion on up to $91,400 of your income. The maximum amount of foreign earned income exclusion increased from $87,600 in 2008. Foreign Housing And Lodging Deductions In addition, you may also claim housing and lodging deductions for the period you live outside the country and perform work for your employer. If you earn foreign income from self-employment, you can qualify for deductions allowed for the cost of your meals and lodging. If you are eligible for the 2009 foreign earned income tax exclusion, you can use this credit to reduce your tax liability. However, you are still liable for self-employment tax. You must report the entire amount of the foreign earned income on your tax return. In order to claim the 2009 foreign earned income tax exclusion, you need to fill out Form 2555.

Tax Exemptions  Qualifications If you took deductions from state and local taxes, sales and property taxes, incentive stock options and other tax deductions and special credit expenses, you may be liable to pay a minimum amount of tax for all these tax advantages you have received benefits from. The amount of income that you bring home plays an important role when the alternative minimum tax exemptions are calculated. The good news is that, beginning with 2009, the tax exemptions amount has increased to $70,950 for married taxpayers filing jointly. For married taxpayers filing separately the amount has increased to $35,475. For singles and heads of household, the tax exemptions level amount rises to $46,700. Need Additional Help With Your  Tax Exemptions, Contact us Today!

Energy Saving Credit New Changes And Help From Joe Mastriano, CPA. For 2009, taxpayers who install solar, geothermal or wind systems in their homes to generate electricity are eligible to receive a tax credit of 30% of the costs of all qualifying improvements. The credit rate is increased from 10% applied in 2006 and 2007. No matter how many energy saving credit items you buy for your residence, you cannot claim more than a $1,500 credit within a two-year period for 2009 and 2010. The maximum energy saving credit limit increased from $500 allowed in the previous years. This energy saving credit also applies to energy saving related renovations such as: adding energy efficient exterior windows, adding insulation, outside doors, windows, etc. A similar energy saving credit was allowed in 2007. However, for 2008, the credit allowed in the previous year was not available. Still Have Questions About The Energy Saving Credit, Contact Us Today!