“Keep more money in your pocket” John Nakowicz, CPA
John helps you understand your income taxes better with some Tax Tips.
- The first $2400 of Unemployment Compensation received will not be taxed.
- Tuition Programs – various ways to receive credit for education needs.
- Computer related deductions:
- 1. Expenses for qualified tuition programs (section 529 plans) will include some purchases of computer technology, equipment or Internet access and related service.
- 2. There are certain conditions that must be followed for this credit.
- 3. It also will exclude most software designed for sports or hobbies.
- American Opportunity Credit
- 1. Formerly Hope Credit, now expanded
- 2. Available for 4 years of post-secondary education.
- 3. Maximum Credit of $2500.00.
- 4. Qualified expenses now include course materials as well as tuition and fees.
- Motor Vehicle Taxes:
- 1. Deduction for certain taxes related to the purchase of NEW cars, trucks, motorcycles, and motor homes.
- 2. This deduction can add to the Standard deduction or taken as an Itemized deduction (if not using the sales tax deduction).
- 3. This will have a limit to the tax imposed and will have a phase out with the AGI.
- 4. Purchase must be made after February 16, 2009 and before January 1, 2010.
- Personal casualty & Theft Losses:
- 1. May be used to add to the Standard deduction or on the Itemized return only to the extent that the loss exceeds $500.00
- 2. No changes to AGI limits on losses.
- Residential Energy Credits:
- 1. Increased credit – now 30%
- 2. Related to the same deductable items as in the year 2007.
- 3. Credit is limited to $1500 total purchases from 2009 and 2010.
- 4. Includes certain roofs and stoves.
- Making Work Pay Credit:
- 1. Maximum credit is $400. ($800 Married Filing Jointly); limited by percentage of earned income.
- 2. Credit is refundable
- 3. Allowed for both employees and self-employed.
- 4. Must file a Schedule M with 1040.
- 5. Reduced withholding will reflect all or part of this credit.
- 6. Requires a Social Security number to be able to file for credit.
- Earned Income Credit:
- 1. The percentage increases to 45% for families with 3 or more children.
- 2. Maximum credit is $5657.00.