Chicago's North Shore of Illinois Real Estate Blog: Year End Tax Savings for 2009
Year End Tax Savings for 2009
Yes, the $8,000 first-time homebuyer credit is still available BUT you must close on your home by the close of business on November 30th. What's missing from this well publicized deadline is the fact that November 30th is the Monday after the Thanksgiving weekend. Realistically this means that you should be out this week making your final purchasing decision in order for your lender to have a chance at closing your loan on time. You'll also want to schedule your closing no later than November 23rd. This allows an extra day or two in case of any delay. If there is a delay on Monday, November 30th you are out of luck. Will there be an extension of this credit? Lots of talk about it but as of right now the answer is "No". The National Association of Home Builders has a site devoted to this credit: www.federalhousingtaxcredit.com .
If you missed out on the Cash 4 Clunkers but are still in the market for a new vehicle, you have until December 31st. That's the deadline to potentially take advantage of a state and local sales tax deduction on your 2009 tax return for the purchase of a new vehicle. There are income phase out levels so check with your tax advisor for details.
Feeling charitable and over 70 1/2? Through December 31st you can take a distribution from your IRA and gift it to a qualified charity without being taxed on the distribution. The limit is $100,000 so you can be generous. Again, check with your tax advisor first.
The non-business/residential energy tax credit is available for 2009 and 2010 for a wide variety of energy saving products. With a credit up to $1,500 you may want to consider updating or remodeling over the next 14 months to save both energy and money.
Make sure you are recording your business, medical and charitable mileage. For 2009 you can claim a deduction of $0.55 per mile for business, $0.24 for medical, and $0.14 for charitable miles driven. If you keep proper records this deduction is significant.
Small business owners can accelerate the write off of certain capital expenditures acquired through the end of 2009. This may greatly reduce the taxable income of that small business.
If 2009 hit your household in the unemployment area you can exclude up to $2,400 in unemployment payments from your gross income on your 2009 tax return. The Earned Income Tax Credit increased for 2009 and you may be eligible to get an advance on this year's credit through your employer. Every little bit helps.
For 2009/2010 you may use funds from a qualified tuition plan (ex. 529 Plan) to purchase a new computer for a student. This is a change from 2008 when it was permitted only when specifically required by a college or specific program course.
These are just a few of the newer tax saving options for 2009 and 2010. Make sure to check your regular tax saving avenues such as IRA and 401K contributions before year end so you know whether you can wait until 2010 or you decide it's best to make those moves before the close of 2009. The IRS website lists a number of common and also overlooked deductions (www.irs.gov).
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