I spoke with Santa, Hanukkah Charlie, Kwanzaa Dan and they all agreed that you might want to hear from Uncle Sam one more time before you start your yuletide celebrations. Uncle, can you take it from here for us? Also, can you explain why you are pointing at us?
Thanks, Kim. I am sorry for pointing at you, I just do it instictively. I really don’t like to point. I just wanted to take a couple minutes and remind your readers and the folks on your “Internet” some things that might help them at tax time since that is around the corner:
I know times are rough and I know that some of you are buying homes for the first time. There is something now called the First-Time Homebuyers Tax Credit. First-time homebuyers should begin planning now to take advantage of a new tax credit available for a limited time. The credit applies to primary home purchases between April 9, 2008, and June 30, 2009. I know Kim yakked about it in an earlier blog. I am just going to touch on it briefly again.
Normally, this tax credit must be paid back in equal payments over 15 years. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. First-time homebuyers are those who have not owned a home in the three years prior to a purchase.
Here is something for all of you homeowners out there:
You are familiar with the Real Estate Tax Deduction, aren’t you? There is an additional standard deduction for those who don’t itemize their deductions, but pay real estate taxes. The additional deduction amount is equal to the amount of real estate taxes paid up to $500 for single filers or up to $1,000 for joint filers. This deduction is available for the 2008 and 2009 tax years and increases your standard deduction.
Got any kids in college? Perhaps this may be of use:
Tuition and Fees Deduction — You may be able to deduct qualified tuition and required enrollment fees up to $4,000 that you pay for yourself, your spouse or a dependent. You do not have to itemize to take this deduction. However, a taxpayer cannot take both the tuition and fees deduction and education credits (Hope & Lifetime Learning Credits) for the same student in the same year. Income limits and other special rules apply to each of these provisions. To determine whether your expenses are qualified, refer to IRS Publication 970, Tax Benefits for Education. The 2008 edition is available soon online. This publication also describes other education-related tax benefits.
Are you a teacher? Check this out:
Educators’ Out of Pocket Expense Deduction — The educator expense deduction allows teachers and other educators to deduct the cost of books, supplies, equipment and software used in the classroom. Eligible educators include those who work at least 900 hours during a school year as a teacher, instructor, counselor, principal or aide in a public or private elementary or secondary school. Worth up to $250, the educator expense deduction is available whether or not the educator itemizes deductions on Schedule A.
Remember that recovery stimulus rebate that I sent you earlier in the year? What? You don’t? You may want to double check your checkbooks and look for the letter I sent you as well. If you didn’t get the rebate (or did) this section may help:
Recovery Rebate Credit — If you did not qualify or did not receive the maximum amount for the 2008 economic stimulus payment you may be entitled to a recovery rebate credit when you file your 2008 tax return. Review the tax return filing instructions including the recovery rebate credit worksheet. You need to know the amount of the payment you received in 2008, which can be found on your Economic Stimulus Payment Notice (Notice 1378). Two online tools on IRS.gov will be available soon — the Recovery Rebate Credit Calculator will help taxpayers figure the amount they should claim on their 2008 tax return, and How Much Was My 2008 Stimulus Payment? helps you determine what your stimulus payment was.
Regarding any cash charitable contributions, please remember that since tax year 2007, to deduct any charitable donation of money, you must have a bank record, credit card statement or a written communication from the recipient showing the name of the organization and the date and amount of the contribution. In determining what may be deducted as a charitable contribution, see IRS Publication 526 for 2008 to be released in the near future.
As long as you don’t abuse this credit, Earned Income Tax Credit (EITC), you might be eligible for this.
This particular credit is offered by the federal government to working families and individuals. You may qualify for the earned income tax credit, or EITC, if you worked, but did not earn a lot of money. EITC is a refundable tax credit meaning you could qualify for a tax refund even if you did not have federal income tax withheld. If you qualify, the amount of your EITC will depend on whether you have children, the number of children you have, and the amount of your wages and income. For more information, go to www.irs.gov/eitc or see IRS Publication 596 for 2008.
If you have any other tax questions, please ask my good friend, Kim. Happy Holidays everybody!
Uncle Sam
If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below. Part of all the proceeds from the sales of that book go to Rett Syndrome research. One girl is born with Rett Syndrome worldwide every fifteen minutes. My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime. Boys born with the Rett gene generally die at birth.
Kim Isaac Greenblatt
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