Highlights of 2009 Tax Legislation
Posted On: January 9th, 2010 by James Posted In: Financial Health
So its time again to gather your info for the tax man. There were some big changes that became available in our US tax code for this past year as a result of our congress attempting to bring relief and stimulation to our overall economy.
My personal CPA and friend Grant Folske has compiled a “highlight reel” of the most pertinent changes that are now available to those who qualify.
HIGHLIGHTS OF THE 2009 TAX LEGISLATION
Homebuyers Credit: The first time homebuyer credit that was to expire on November 30, 2009, has been extended five months and is available for qualified purchases for taxpayers who sign a purchase agreement before May 1, 2010 and close before July 1, 2010. The maximum credit is $8,000. The new law increases income limits of the credit phase-out to $125,000-$145,000 for individuals and $225,000-$245,000 for joint filers. Also, taxpayers who have lived in their current residences for five consecutive years out of the last eight years and who purchase a primary residence may qualify for a credit up to a $6,500.
Residential Energy Efficient Property Credit: A tax credit equal to 30% of the cost of solar water heaters and small wind turbines is available through 2010.
Net Operating Loss Carryback: Individuals who have business losses in 2009 that create a net operating loss may carryback the loss five years to offset income from those years and receive a tax refund. For 2010 the carryback period is scheduled to return to two years.
Alternative Motor Vehicle Credit: There are tax credits available for several types of alternative fueled vehicles that vary in amount based on several factors. These vehicles include qualified fuel cell vehicles, advanced lean burn technology vehicles, qualified hybrid motor vehicles, and qualified alternative fuel vehicles.
Roth IRA Conversions: Beginning in 2010 there are no income limits related to converting IRA accounts to Roth IRA accounts. Also, the income created by converting to a Roth IRA in 2010 can be included in income in 2011 and 2012 (50% in each year), instead of reporting all of the income on the 2010 tax return.
We hope the above information is useful to you. Please contact Grant Folske CPA if you would like additional information on the new laws or if you would like to discuss your tax situation in more detail.
And for my PERSONAL disclaimer: I am NOT a CPA, and I am not giving out tax advice here. Only spelling out the facts as I understand them. For those of you who were my clients in the year of 2009, you can expect to receive another copy of your closing statement in the mail from me soon. Please keep it for your tax preparer. And thank you again for being my client!
I will be blogging about the Homebuyer tax credit more this quarter as we get closer to its expiration, as well as the ROTH IRA conversion (which could have some very exciting implications to many of you).
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