Taxes 2010!

Welcome Back!

Last week we talked a little about protecting yourself and your business from fraudulent activity.  Let’s take a quick look at Taxes 2010!

We had some late breaking tax law changes in 2010 and the IRS is playing reprogramming catch up.  Having said, taxpayers that file Schedule A (itemized deductions), and claim Higher Education Tuition and Fees Deduction, and Educator Expense Deduction may need to delay filing their 2010 tax returns until the later part of February.

First-time homebuyers may be eligible for a tax credit if the home was contracted on or before the end of April and closed by Sept. 30, 2010.  Take note that special filing and documentation is required.  Also, if you have not owned a home in recent years you may be eligible for the credit!  In fact, long-time residents of the same main home may qualify for the credit under certain conditions!!

Did you make qualified energy efficient improvements or purchases to/for your home in 2010?  If so, we can help you get up to the $1,500 maximum energy tax credit for improvements and 30% of the costs of purchases.   By the way – qualified plug-in electric vehicles’ minimum credit amount is $2,500.  We can help with that too!

Earned income tax credit (EITC) has temporarily been increased for taxpayers with three or more qualifying children. The temporary maximum EITC for is $5,657.  If your earnings were impacted by today’s economic conditions you may qualify.

Speaking of children, taxpayers who cannot take full advantage of the child tax credit because the credit is more than the taxes they owe may receive a payment for some or all of the credit not used to offset their taxes. It is a refundable credit, which means taxpayers may receive refunds even when they do not owe any tax.

The maximum adoption credit increased to $13,170 per child and it is now refundable!  So, even no tax is owed, you will enjoy the benefit of a refund.  Let us help you maximize this credit if you adopted a child in 2010.

Moving on – literally – the 2010 standard mileage rate is now .50 cents.  And the standard mileage rate for the cost of operating your car for medical reasons or as part of a deductible move is 16.5 cents per mile.

Yes – current economic conditions have been detrimental for some taxpayers!  In fact, we know that many have lost their homes due to foreclosure.  If your mortgage debt was partly or entirely forgiven in 2010, you may be able to claim special tax relief.  We can help you wade through the considerations and requirements.

You or a family member may be eligible for a tax credit of 80% of qualified health insurance premiums!  Let’s see... Did you lose your job because of trade with foreign countries and you are a TAA recipient?  Or, was your benefit plan terminated without sufficient money to pay all benefits and the PBGC is now the trustee of the plan?  If so, the Heath Coverage Tax Credit (HCTC) may benefit you!

You know, sometimes individuals are imposed with tax liabilities due to deficiencies caused by their spouse (or former spouse).  There are three different types of innocent spouse relief depending on the circumstances. 

Also, keep in mind that you can convert a regular IRA into a Roth IRA.  Yes, tax liabilities would be incurred, but future gains would be tax free.  May be something to really consider…

So -  there have been quite a few changes and there are many considerations that effect your tax position – only a few are mentioned here. The most important consideration is making sure your tax preparer is qualified and ethical.  You know… like Merian L. Callaway CPA LLC!  We are willing and ready to provide the tax services you need. 

Tax season has started…  we can be contacted by phone, email, Twitter and Facebook…

Peace and Blessings,