YEBies Presents: Weekly Tax Tips For The Win (WTTFTW) Week 2
Weekly Tax Tips For The Win
(WTTFTW)
We're back with the 2nd installment of tax tips. This is the time of year when the dealers put money in their mom's bank account to get cars in her name and say its her "income tax refund". This week I am going to discuss the tax saving and benefits that were put in place this year due the Economic Stimulus Package (remember that?).
Tax Tip 1: First-Time Home Buyer Tax Credit:
This is probably the most well known tax credit that came out of the stimulus package so I won't spend to much time on it. This is just a reminder for those who purchased a house and decided not to amend their 2008 tax return. Don't forget to claim your tax credit on your 2009 return. Visit this website for all the housing tax credit you need. Federal Housing Tax Credit
Tax Tip 2: New Car Sales Tax Deduction:
Another creation from the Economic Stimulus package is this New Car Sales Tax Deduction. If you purchased new car (in this case new means you were the first owner of the car) after February 16th, 2009 you are allowed to take a deduction for the state sales tax paid on your tax return for 2009. As there is with every tax law, this deduction as a few limitations. Here they are:
1) The deduction is only for sales tax paid on a purchase price up to $49,500. Meaning if you purchased a car for $60,000, the amount taxes paid on the additional $10,500 ($60,000 - $45,000) will not be deductible on your tax return.
2) Single taxpayers with income over $135,000 are not be eligible to take this deduction. The income limitation is $260,000 for married filers.
Check out this Q & A from the IRS Website for more information here.
1) The deduction is only for sales tax paid on a purchase price up to $49,500. Meaning if you purchased a car for $60,000, the amount taxes paid on the additional $10,500 ($60,000 - $45,000) will not be deductible on your tax return.
2) Single taxpayers with income over $135,000 are not be eligible to take this deduction. The income limitation is $260,000 for married filers.
Check out this Q & A from the IRS Website for more information here.
Tax Tip 3: American Opportunity Tax Credit
The Economic Stimulus Package created this tax credit that replaces the traditional Hope Tax Credit for 2009 and 2010. Individuals that make less than $80,000 can receive a tax credit of $2,500 for tuition and qualified educational expenses paid in 2009. In order to receive this credit, you will have had to spend over $4,000 on tuition and expenses in the year. For more information, view this write-up from the IRS here.
As always, if you have any questions, comments, or concerns, leave a comment and I'll respond according.
Peace,
Your Resident Taxpert