As a Top 5 in Real Estate Member, I counsel many clients on a wide
range of financial concerns, not just their real estate investments. As
2009 comes to a close, I wanted to alert you to some important
information that could save you money come tax time.
In addition to the $8,000 tax break for first-time home buyers and the
newly expanded tax credit that includes move-up buyers, new tax-relief
bills passed in 2008 provide for a number of other tax breaks that may
lower your 2009 tax debt. Plan now and review these breaks with your
accountant to see if they could help reduce your tax liability in 2009
and beyond:
• Payroll Tax Credit. For 2009 and 2010, Congress gave
workers a 6.2% credit on earned income, applied as lower income tax
withholding (there are caps based on income). Recipients of Social
Security, Railroad Retirement benefits or Supplemental Security Income,
some federal workers, and veterans with disability pensions will get a
one-time $250 check. Self-employed workers may be able to reduce
quarterly estimated payments to get advance benefits.
• Larger Personal Exemptions. For 2009, each personal exemption you can claim is worth $3,650—up by $150 over 2008.
• Higher Standard Deductions. The standard
deduction for married couples filing jointly rises to $11,400 up by
$500 from 2008. For singles, the amount increases to $5,700—up by $250
over last year, and heads of households can claim $8,350, a jump of
$350.
• Tax Credit for College Tuition. For 2009 and
2010, the Hope credit is replaced by a new credit of up to $2,500 per
student a year for four years of college, not just the first two years.
It now also covers the cost of books, but begins to phase out based on
higher incomes.
• Child Tax Credit. If the credit exceeds the
filer’s tax liability, all or part of the credit will be refunded if
the filer earns more than $3,000 – down from $12,550 in 2008. (Also,
for families with three or more children, the maximum earned income tax
credit for 2009 and 2010 rises by $628.50)
Other changes that could affect you include higher income limits for
deductible IRAs and Roth IRAs, higher estate tax and gift tax
exemptions, credit for energy-saving home improvements, and partial
exclusion of unemployment benefits.
To understand how the new tax breaks could save you money, consult with your financial advisor or
e-mail me
for more information. Be sure to pass this email along to your family
and friends—in these tough economic times, we could all use a tax break!