Did you know the IRS Tax Code has over 2,800,000 pages? This is why many people would love to simplify the tax system. But until that happens, when mid-April rolls around, we are all reminded that we need to report our income to Uncle Sam. With the tax deadline rapidly approaching (this Thursday April 15th), we wanted to remind our neighbors of a few tax tips specific to your situations, that could lower the tax bill on your 2009 tax returns.
Making Work Pay Credit
This credit is available to couples with incomes below $150,000 and individual incomes below $75,000. Basically it allows individuals/couples who have taxes withheld from their paychecks, a credit of $400/$800 for 2009 & 2010. Tax credits are great because it provides a dollar for dollar deduction in tax liability. This credit became available with the stimulus plan passed in July 2009, so make sure you don’t miss it.
Moving Expenses
For any neighbors that recently moved in to any of the neighborhoods off of Lineberry Drive, you may be able to deduct your moving expenses. So be sure to document all expenses related to moving. To make the deductions you must have moved because of a new job. In order to make the deduction you will need to pass the distance and time test. If your new job is 50 miles further away than your old commute from your old house to your old job, then you pass the distance test. You must also work full-time for 39 weeks in the 12 months following your move. If you are self-employed you must work 78 weeks in the 24 months following your move. If you fall into these categories, you can fill out IRS form 3903 and then add the amount to the front page of your IRS tax return on line 26.
Deducting Property Taxes
Don’t forget about your property taxes. Most homeowners are able to itemize deductions, which allows you to deduct the property taxes you pay on your house and your cars.
Common Misconceptions
Unfortunately, there are a few things that you cannot deduct. This includes your HOA dues and any of your time spent volunteering for community organizations. Also, try to peel out your fire or home insurance premiums from your house payment, as neither will be deductible.
Remember, tax laws can and do change often. If you have further questions on details about your personal tax situation, please consult a CPA and other qualified tax professionals.
Tags: credits, dues, hoa, property tax, taxed, wake county