With the end of 2009 comes tax planning opportunities for individuals and business owners. Here is a list of tax issues to consider:
- Generally, if you owe a debt to someone and they cancel or forgive that debt, the cancelled amount may be taxable.
- Required Minimum Distributions (RMD's) for retirement accounts are not mandatory this year.
- The estate tax for 2009 is 45% on anything over $3.5 million. The tax is set to go to 0% for one year in 2010 but democrats are expected to change that law.
- Job hunting expenses such as miles driven, parking, tolls, long distance calls and other costs may be deductible.
- Home buyer tax credit is expanded to first time buyers and buyers who have been in their primary residence for five consecutive years out of the last eight.
- If you have capital losses you can carry them forward to offset capital gains you may have in 2009. The current capital gains rate is 15% for most tax filers.
- Even if you don't have capital gains you can use up to $3,000 of capital losses to offset ordinary income.
- Annual Gift Tax Exclusion is $13,000 per individual. This amount can be given to an unlimited amount of people.
- Sales tax and excise tax deduction on the first $49,500 for new vehicles purchased from February 17th to the end of 2009. Of course, there are income phase outs.
- Energy efficient tax credits which allow up to 30% of the cost of energy improvements to your main residence. The credit maxes out at $1,500 for a combined two year period.
