The Housing Assistance Tax Act of 2008, passed by Congress and recently signed by the President provides a number of tax law changes, some of which include:
·First Time Homebuyer Tax Credit
The “first-time home buyer credit” is a temporary refundable, repayable tax credit equal to 10% of the purchase price of a home, up to $7,500 for singles and married couples filing jointly. (Singles who buy a house together get only $3,750 each, as do married couples filing their tax returns separately.) Also, you must close on your new house between April 9, 2008 and July 1, 2009.
But the way the credit works, it’s actually more like an interest-free loan. Two years after you claim this credit, you have to start paying it back. The payback comes over 15 years in 15 equal installments–meaning you owe an extra $500 on your tax return each year. Sell your house, and you have to pay the rest back that year from your profits. (No profits, no pay back. Also, if you die, your heirs are off the hook.)
The allowed credit starts being reduced once a single has $75,000 of modified adjusted gross income, or once a couple has $150,000 of income. The credit goes away entirely at $95,000 for singles and $170,000 for couples.
Mileage Rate for 2009-
Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
55 cents per mile for business miles driven
24 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations
As part of the stimulus package, there are certain energy credits available on your 2009 return. Please give our office a call for information on these credits.
Minimum Wage Hike
Minimum wage increased to $7.25, effective July 24, 2009.
Qualified Bicycle Commuting Expenses
Beginning with years after 2008, employees may exclude reimbursements paid by employers for qualified bicycle commuting expenses. The maximum exclusion is $20 times the number of months the employee uses a bicycle for commuting to work. Allowable expenses include the purchase, maintenance, repair and storage expenses related to commuting. IRC 132(f)
The bicycle commuting expense exclusion cannot be claimed for any period in which the exclusion for public transit passes or qualified parking is claimed.
Appliances Rebate Update
The State of North Carolina will implement a two-phase rebate program to help residents replace older, inefficient appliances with Energy Star qualified appliances. The first phase is tentatively scheduled to begin in April, 2010 and will be a limited-time, instant rebate for refrigerators, freezers, clothes washers, and dishwashers. A Phase 2 mail-in rebate for several types of water heaters, as well as gas furnaces, and central air condidtioners is tentatively scheduled to begin in June, 2010 and will continue until reamining funds are depleted. Total funding $8,849,000.
Sales tax on vehicles
Be sure to let us know if you have purchased a new vehicle in 2009, as the sales tax is deductible. The deduction is limited to the first $49,500 of the purchase price, and there is a phase out beginning at $125,000 AGI for singles and $250,000 AGI for couples.
Dependents
Dependents must file a tax return if their gross earned income is at least $5700 or unearned income is greater than $950.
***Be sure to let us know if your dependent filed a tax return and claimed himself. The largest percentage of returns are rejected when we attempt to efile due to dependents filing and claiming themselves and then the parents claim them as well. ***
Are payroll and payroll tax returns tying you in knots or taking way too much of your time?
We offer flexible services for your payroll needs.
Weekly, bi-monthly, monthly payroll computation
Computation of payroll deposit amounts
EFTPS enrollment and weekly/monthly reporting
Preparation of quarterly payroll tax returns (whether we prepare your payroll or you prepare it yourself)
Preparation of W2 and 1099 forms
We can do as little or as much as you need for us to do.
Don't forget to visit the financial literacy website for tons of useful information regarding planning for different stages of life. There are links to many useful web sites to assist you in these difficult financial times.
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rhonda@GregoryCPAs.com
