Back to Top

JIM SANDAGER IS SENIOR VICE PRESIDENT, FINANCIAL ADVISER, OF WEALTH ENHANCEMENT GROUP AND HOST OF “YOUR MONEY” ON WHO-AM (1040) RADIO. • JANUARY 24, 2010

Continue Reading »

Saturday, January 23, 2010 12:45 PM CST

According to the Associated Press, taxpayers will be able to write off charitable donations to Haiti earthquake relief efforts when they file their 2009 taxes this spring under a bill President Barack Obama signed yesterday (Fri., Jan. 22).

The measure sped through Congress, receiving final approval Thursday.

Under current law, donors would have to wait until they file their 2010 returns next year to take the deductions. The bill would allow donations made by the end of February to be deducted from 2009 returns.

A similar law was enacted in 2005 for donations to victims of the Indian Ocean tsunami in December 2004.

The White House announced this week that the president and first lady Michelle Obama donated

Continue Reading »

Continue Reading »

New Homebuyer Credit - Claim It: English | Spanish

New Homebuyer Credit - Military: English
For these and other videos: YouTube/IRSVideos

WASHINGTON - The Internal Revenue Service today released the new form that eligible homebuyers need to claim the first-time homebuyer credit this tax season and announced processing of those tax returns will begin in mid-February. The IRS also announced new documentation requirements to deter fraud related to the first-time homebuyer credit.
The new form and instructions follow major changes in November to the homebuyer credit by the Worker, Homeownership, and Business Assistance Act of 2009. The new law extended the credit to a broader range of home purchasers and added new documentation requirements to deter fraud and ensure taxpayers properly claim the credit.
With the release of Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, and the related instructions, eligible homebuyers can now start to file their 2009 tax returns. Taxpayers claiming the homebuyer credit must file a paper tax return because of the added documentation requirements.
The IRS expects to start processing 2009 tax returns claiming the homebuyer credit in mid-February after it completes the updating and testing of systems to meet the law’s new requirements. The updates allow the IRS to put in place critical systemic checks to deter fraud related to the homebuyer credit.
Some of these early taxpayers claiming the homebuyer credit may see tax refunds take an additional two to three weeks.
In addition to filling out a Form 5405, all eligible homebuyers must include with their 2009 tax returns one of the following documents in order to receive the credit:

• A copy of the settlement statement showing all parties’ names and signatures, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement.
• For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.
• For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

In addition, the new law allows a long-time resident of the same main home to claim the homebuyer credit if they purchase a new principal residence. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. The IRS has stepped up compliance checks involving the homebuyer credit, and it encouraged homebuyers claiming this part of the credit to avoid refund delays by attaching documentation covering the five-consecutive-year period:

• Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
• Property tax records or
• Homeowner’s insurance records.

The IRS also reminded homebuyers that the new documentation requirements mean that taxpayers claiming the credit cannot file electronically and must file paper returns. Taxpayers can still use IRS Free File to prepare their returns, but the returns must be printed out and sent to the IRS, along with all required documentation.
Normally, it takes about four to eight weeks to get a refund claimed on a complete and accurate paper return where all required documents are attached. For those homebuyers filing early, the IRS expects the first refunds based on the homebuyer credit will be issued toward the end of March.
The IRS encourages taxpayers to use direct deposit to speed their refund. In addition, taxpayers can use Where’s My Refund? on IRS.gov to track the status of their refund.
More details on claiming the credit can be found in the instructions to Form 5405, as well as on the First-Time Homebuyer Credit page on IRS.gov.

New vehicle sales tax - Effective January 1, 2010, individuals will no longer be able to take the itemized deduction or increase in standard deduction for sales tax on the purchase of a new motor vehicle.

Sales tax – Individuals will no longer be able to take an itemized deduction for state and local sales tax.

Educator expenses – Teachers will no longer be allowed to deduct out of pocket expenses incurred for school supplies. In the past, a deduction from adjusted gross income of up to $250 was allowed.

Roth IRA conversion – There are no income limits in 2010 for individuals that would like to convert a traditional IRA to a Roth IRA. Also, for any conversions in 2010, the tax will be paid in 2011 and 2012.

Phase outs - In 2010, there will be no phase out of itemized deductions or personal exemptions. This change will greatly benefit high income earners.

Unemployment income – In 2009, those receiving unemployment benefits can exclude up to $2,400 from their taxable income. This tax benefit will no longer be available in 2010.

Charitable distributions / contributions – Charitable distributions made directly from an IRA account to a qualified charity will no longer be excluded from your income

Home buyers credit – If you got on the home buyers tax credit gravy train back in 2008, you are required to start paying the credit back in 2010.

Alternative Minimum Tax – The AMT exemption is scheduled to decrease to $33,750 for single filers and to $45,000 for those filing a married joint return.

Retirement contributions - There is no change in the maximum contribution and individual can make to a 401(k) plan in 2010. This remains at $16,500. The catch up contribution of $5,500 for individuals age 50 + also remains the same.

Mileage reimbursement rates – Theupdated mileage reimbursement rates effective for January 1, 2010 are $0.50, $0.165 and $0.14 for miles incurred for business purposes, medical purposes and charitable purposes, respectively. These rates just changed yesterday.

The tax code is very voluminous and changing all the time. If you are in need of a quick reference source to keep these things straight, check out the 2010 Tax Facts at-a-Glance.

Continue Reading »

Tax Write Offs for the Self Employed…Discover 101 Ways To Reduce your Taxes Legally…

Unfortunately, we had been students of self-employed tax deductionsstrategies for over 20 years before we learned what I’m about to share with you regarding tax reduction tips.

I was shocked when we first found out that as self employed owners there were more tax loopholes than the limited itemized tax deductions that we had routinely rehearsed and become accustomed to.

My husband and I thought we were savvy Continue Reading »

Tips for the Finance-Savvy, Tax-Sexy Business Owner

By Barbara Mannino

- FOXBusiness

Here are tips for how to live your dream and not let it turn into a financial nightmare from credit-and-debt management expert Clarky Davis, tax-specialist and author of The Tax Lady’s Guide to Beating the IRS: And Saving Big Bucks on Your Taxes Roni Deutch and finance guru David Bach.

Tips for the Finance-Savvy, Tax-Sexy Business Owner

By Barbara Mannino

- FOXBusiness

Here are tips for how to live your dream and not let it turn into a financial nightmare from credit-and-debt management expert Clarky Davis, tax-specialist and author of The Tax Lady’s Guide to Beating the IRS: And Saving Continue Reading »

business-tax deductions for putting out Ask Your Doctor advertising.

The U.S. and New Zealand are the only two countries in the world that allow direct-to-consumer advertising of prescription drugs. Critics of drug ads say they drive up health care costs by encouraging people to ask their doctors for specific drugs, instead of letting the doctor choose the most appropriate therapy.

Drug makers will continue to get Both the House and Senate considered options to end drug ad tax deduction as a business expense. But none of the options to restrict consumer drug ads ever made it out of committee into the health care reform bills.

The options to end the deductions were opposed by broadcasters and other lobbying groups for magazines, newspapers and publishers. Drug makers spent about $4 billion in drug Continue Reading »