Major tax law changes continue to impact most taxpayers. New 2009 tax laws enacted to stimulate the economy are in addition to law changes enacted in 2008. Some of the broadest changes are outlined here for your review:
Unemployment benefit tax break. Up to $2,400 of 2009 unemployment benefits are not to be taxed. With unemployment approaching 10%, many should benefit from this change.
Minimum Distribution Requirement Waiver. Retirees may waive the requirement to take a minimum distribution from their qualified retirement plans in 2009. This change is made to allow retirees' funds to recover from the dramatic drop in value during the recession.
Personal Casualty/Theft Loss Change. Each casualty/theft loss must now exceed $500. This is up from $100 in 2008. Please recall that these losses must exceed 10% of your adjusted gross income to qualify.
Education Benefits Get Better. The Hope Credit education expense deduction has been increased (up to $2,500) and expanded from two to four years for post-secondary education. In addition, the credit is now refundable and "course materials" have been added as a qualifying expense.
Cash for Clunkers...PLUS! If you took advantage of the "cash for clunkers" new car incentive program in 2009, rest assured the benefit is not taxable. In addition, new (not used) vehicle general sales tax and use tax is also deductible for most taxpayers.
First-Time Homebuyer Credit gets better. If you are a first-time homebuyer in 2009 you may also be eligible for a credit of 10% of your home's purchase price (up to $8,000).
Debt Forgiveness. As a carryover from previous law changes please remember that certain home foreclosures may not be deemed taxable income to you. Usually debt forgiveness results in taxable income.
Renewable/Efficient Energy Incentive. Numerous new tax incentives exist in 2009 to help encourage investment in energy saving alternatives. There are scores of new and revised programs. So whether you purchase a new solar hot water heater or energy efficient windows for your home, you should note and keep all receipts for home improvements that may qualify.
This is a brief summary of some of the broadest tax provision changes for 2009. There are also many pre-programmed changes built into the tax code. Should you have any questions regarding you situation, please call.
