2009 Tax Planning

There are changes in the economy (recession), changes in the White House (new President) and, of course, changes in the tax code (more confusing)!

Let’s take a look at some of the things you will need to know about for your 2009 taxes.

There’s a lot of conversation regarding “Make Work Pay.”  Some taxpayers are under the misconception that they will receive a check in the mail, like the stimulus.  In actuality the “Make Work Pay” tax credit is a reduction in your tax rate that you should be able to see as an increase in your take home pay.  Contact the payroll department where you work and find out if you need to change your withholding to reflect the credit.

There is a first time homebuyer tax credit.  It is important to know that the Internal Revenue Service defines a first time homebuyer as someone who has not owned a principal residence for three years before the purchase of the new home.  Of course, you must also buy the house within calendar year 2009.

If you make an energy conserving improvement to your home in 2009, you can get a tax credit.  You can take advantage of the Energy Conservation Credit and receive up to a $1500 tax credit.  However, you must apply that credit to your 2009 and 2010 taxes.  So it is only good for $750 each of those years.

You can receive a tax credit for the purchase of hybrid automobiles. Banner Stands . Banner Stands . The American Recovery and Reinvestment Act along with the Emergency Economic Stabilization Act make it possible for you to get credits depending upon the propulsion, height, and weight of a hybrid vehicle.

There are tax breaks for flood victims in 2009.  The tax breaks for flood victims come in the form of expanded deductions.  Prior to 2009, flood victims could only claim loss up to specific amounts; however, they can now claim the totality of their loss as a deduction.  Remember that you can only get the full credit if you itemize your deductions.

The first $2400 of unemployment assistance is now free from taxation.

With so many changes in 2009 tax laws, restrictions, regulations, credits, deductions, exemptions, and liabilities, things can get confusing.  It is important to know how the new tax laws affect you and what credits, deductions, and exemptions you are now entitled to use.  In order to be certain that you are not missing out on any tax breaks for which you qualify, there are two methods †just refer to the eBook ‘Stop donating your money to IRS’ which will help you in understanding the whole thing in simple language. It may also be good idea to have a tax professional prepare your 2009 income tax return.