Friday, January 22, 2010

6 Surprising Facts About the Buyer Tax Credit...
The homebuyer tax credit is not as simple or straightforward as you might think. Here are some nuances that will affect homebuyers who plan to use it.
To qualify for the move-up tax credit, a home owner must have occupied the same principal residence for five of the last eight years consecutively.
Buyers can elect to claim the credit on either their 2009 or their 2010 tax return, whichever is best for them.
Buyers who claim the credit in 2009 can’t file electronically because the Internal Revenue Service hasn’t put the required forms on line. The wait for a refund is three or four months.
The home can be a mobile home or travel trailer that is fixed to land owned or leased by the home owner. A mobile home or travel trailer that is actually mobile doesn’t qualify.
The home can’t be purchased from a close relative, including a parent, spouse, child, grandparent or grandchild.
A buyer who earns no taxable income or doesn’t owe any federal income tax can qualify for the tax credit and file a tax return just to claim it.
Source: Bankrate.com, Marcie Geffner (01/21/2010)

Wednesday, January 20, 2010

IRS Deductions for Georgia Storm and Flood Victims...
Georgians impacted by recent severe storms may be able to increase their standard deduction by claiming their net disaster losses suffered from the federally declared disaster. Provisions of the National Disaster Relief Act allow all taxpayers to claim the casualty loss deduction regardless of their income level. In addition, the law waives a requirement limiting casualty losses to those that exceeded 10% of the taxpayer’s adjusted gross income.
"Eligible taxpayers may be able to deduct disaster losses, even if they don’t itemize, through an increased standard deduction,” said IRS Spokesman Mark S. Green. "This increased deduction is limited to unreimbursed losses. You cannot claim losses that were covered by insurance.”
The standard deduction is a dollar amount that reduces the amount of income on which you are taxed. It is a benefit that eliminates the need for many taxpayers to itemize actual deductions, such as medical expenses, charitable contributions, and taxes, on Schedule A of Form 1040.
The increased standard deduction for disaster losses is a benefit that could help many Georgia residents. More than two-thirds of the returns filed by taxpayers each year claim the standard deduction instead of itemizing deductions.
"It’s also important for taxpayers impacted by this federally-declared disaster to note this on their tax returns,” said Green. "They should write "Georgia/Severe Storms and Flooding” at the top of their tax returns and any other documents filed with the IRS to identify themselves as storm victims eligible for disaster relief.”
For more information on figuring a casualty loss deduction, see IRS Publication 547, Casualties, Disasters and Thefts, and Form 4684 , Casualties and Thefts. Also, the IRS offers Publication 584, a workbook you can use to calculate personal property losses. These helpful forms and publications can be found on the IRS Web site at IRS. gov.
For disaster information call IRS Disaster Hotline at 1-866-562-5227 or call the IRS toll-free number for general tax questions at 1-800-829-1040.
Decatur Dispatch, January 2010