QuickTips Index
First-Time Homebuyer Tax Credit
There's a new, refundable tax credit of up to $7,500 for the purchasing a primary residence. The credit is available to first-time homebuyers who purchase a primary residence after April 9, 2008, and before May 1, 2010.
Adoption Tax Credit
You qualify for the adoption tax credit if you adopted a child and paid out-of-pocket expenses relating to the adoption.
Standard Deduction
Taxpayers can opt to take a standard deduction (a flat dollar amount that reduces taxable income) or itemize their deductions instead. The standard deduction amount varies by a person's filing status, age, and whether they are blind. Starting with tax year 2009, people may need to use Schedule L to list various additions to their standard deduction.
US Withholding for Canadian Independent Contractors
Canadian citizens who have income from US sources should fill out Form W-8BEN to claim a reduce amount of income tax withholding. Find out how to qualify for benefits under the US-Canada Tax Treaty and how to fill out Form W-8BEN.
IRS Tax Penalties
If you owe taxes, the IRS will calculate penalties and interest on the amount owed. If you have a refund, the IRS may pay you interest on the delayed refund.
Year End Tax Tips
Here's a list of simple tax moves you can do before the end of the year to keep your income taxes as low as possible.
Adjusting Tax Withholding from Your Paycheck
Revising your paycheck withholding involves several steps. In this article I walk you through all the steps I take whenever a client ask me to review their current level of withholding. The key is using available calculators available on the Web to make sure that you have just enough tax deducted from your pay.
Employee Stock Purchase Plans
Shares of company stock purchased through an Employee Stock Purchase Plan (ESPP) is subject to different tax treatment compared to other investments. Part of the gain is taxable as compensation income and subject to the ordinary tax rates. The remainder of the gain is treated as capital gain, which can be taxed at the lower long term capital gains rate. How much of the gain is taxed as compensation depends on how long you hold the shares.
Education Credits
You can reduce your taxes by claiming a tax credit for education expenses. Learn about the Hope Credit, the Lifetime Learning Credit, and other information for Form 8863.
Offer in Compromise: Settle Your Tax Debt
You might be eligible to settle your tax debt for less than what you owe through the Offer-in-Compromise (OIC) program from the IRS. The IRS revised their instructions and forms for the offer program in October 2004. Find out what's new.
Installment Agreements
A monthly payment plan is generally the easiest way to set up an arrangement to pay off any taxes owed to the Internal Revenue Service. There's four different types of installment agreements offered by the IRS. The important thing is knowing which installment agreement you qualify for.
American Opportunity Tax Credit
The American Opportunity Tax Credit provides up to $2,500 for people pursuing undergraduate education. Replacing and expanding on former the Hope credit, the American Opportunity credit is scheduled to be effective for the years 2009 and 2010 only.
Can Two Taxpayers Claim the Same Dependent?
The way the tax laws are written, only one person can claim a dependent on their tax return. Two parents may be able to both claim tax breaks associated with a child, provided the custodial parent agrees. The non-custodial could claim the dependent's personal exemption and the child tax credit. The custodial parent could claim the rest of the child-related tax breaks.
Sales Tax Deduction
Sales tax may be a deductible against your federal income taxes. This is an itemized deduction and is claimed on Schedule A. The sales tax deduction is available only for the years 2005 through 2009. For 2010 and later, the sales tax deduction will go away unless Congress extends this particular tax break.
Tax Treatement of Credit Card Rewards and Frequent Flyer Miles
Rewards and discounts issued by credit card companies and frequent flyer miles are not considered taxable income. However such rewards and discounts can reduce the cost of a tax-deductible expense.
Tuition & Fees Deduction
If you took college classes, you can take a federal tax deduction for the cost of tuition and school fees.
Vehicle Sales Tax Deduction
A one-year-only deduction for 2009, individuals who purchase a new vehicle (including motor homes) can deduct sales tax or excise taxes, even if they don't itemize. The deduction is limited to the sales or excise tax applicable to the first $49,500 in the vehicles purchase price, and the deduction phases out at an adjusted gross income of $125,000 (or $250,000 for joint filers).
Selling Gift Property
People often end up owning real estate and other property when the original owner has given that property to them. Transfers of property given before the original owner dies is called a gift. Recipients of gift property have different tax consequences than recipients of inherited property.
Payroll Taxes
Payroll taxes are the responsiblity of every employer. Find essential information on how to report payroll taxes.
Additional Standard Deduction Amount for Property Taxes
The Housing Assistance Tax Act allows homeowners to claim an additional standard deduction for property tax if the taxpayer does not itemize. The additional amount is limited to $500 or $1,000 for joint filers.
Unemployment Benefits
Unemployment benefits are taxable income, but a new law for 2009 makes the first $2,400 of unemployment benefits tax-free.
Child Tax Credit
If you have children, you qualify for the Child Tax Credit. Find out how to fill out the child tax credit worksheet and if you need to file IRS Form 8901.
Tax Calendar
Calendar of important tax deadlines relating to 2008 tax returns that are due in 2009.
IRA Deduction
If you contributed to a traditional individual retirement account (IRA), you can take an above-the-line tax deduction for your contribution on Form 1040. Your deduction reduces your taxable income dollar-for-dollar.
Death of a Taxpayer
When a person dies, his surviving spouse or personal representative should file a tax return on behalf of the deceased.