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Haiti relief donations
in 2010 could qualify for
Tax deduction in 2009
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As you know, Haiti is suffering from a huge disaster that has endangered its existence as a nation with this new earthquake tragedy that has taken the lives of more than 150,000 people and counting. Damages are in the billion making its economy more dependent than ever.
On January 25, 2010, the Internal Revenue Service announced that people who gave to charities providing earthquake relief in Haiti can claim these donations on the tax return they are completing this season. Yes, taxpayers who itemize deductions on their 2009 return qualify for this special tax relief provision. Only cash contributions made to these charities after January 11, 2010 and before March 1, 2010 are eligible. This includes contributions made by text message, check, credit card, or debit card.
“Americans have opened their hearts to help those affected by the Haiti Earthquake”, said the IRS Commissioner, Doug Shulman. “This new law provides an immediate tax benefit for the many taxpayers who have made generous donations.”
This new law only applies to cash (as opposed to property) contributions. The contributions must be made specifically for the relief of victims in areas affected by the January 12 earthquake in Haiti. Taxpayers have the option of deducting these contributions on either their 2009 or 2010 return, but not both.
Be sure your contributions go to qualified charities. Most organizations eligible to receive tax-deductible donations are listed in a searchable online database available on IRS.gov under Search for Charities. Some organizations, such as churches or governments, may be qualified even though they are not listed on IRS.gov. Donors can find out more about organizations helping Haitian earthquake victims from agencies such as USAID.
As always, if you have any questions, or need assistance, please give us a call.
The IRS reminds donors that contributions to foreign organizations generally are not deductible. IRS Publication 526 provides information on making contributions to charities.
Request an appointment or more information
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| Homebuyer Credit Extended and Expanded
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Expanded and Extended -First Time Homebuyers Tax Credit now includes Existing Homeowners, too
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November 16, 2009 As anticipated, just last week Congress extended and expanded, the first time home buyers’ credit. It is now extended through April 30, 2010 and won’t lapse on November 30th as previously scheduled. Binding sales contracts signed by April 30, 2010 must close by June 30, 2010 to qualify for the credit.
The credit has been expanded to higher-income earners as well. For homes purchased after November 6, 2009, married couples can claim the full $8,000 tax credit (assuming that the home cost $80,000 or more) if their adjusted gross income is $225,000 or less, up from $150,000 previously. For them, the credit phases out over the next $20,000 of AGI and ends at $245,000. The phase-out for single tax payers starts at $125,000, up by $50,000, and ends at $145,000.
In addition, current homeowners can receive a special tax break as well. Those who’ve owned a home for five (5) consecutive years out of the last eight (8), they now qualify for a tax credit of up to $6,500, if they go out and purchase another home after November 6, 2009 and before May 2, 2010. Same as with the first-time homeowners, the house must be the buyer’s principal residence.
Buyers can claim qualifying 2009 purchases on amended 2008 returns. Credits for 2010 go on 2009 returns. The credit is “refundable”, which means it will only reduce tax owed to a maximum net tax due of zero.
So here comes the “small print”:
· Homes costing over $800,000 don’t qualify for either the $8,000 or $6,500 tax credit if they were purchased after November 6, 2009.
· No credit is allowed for purchasing a home after November 6 from your in-laws. This will close that “loophole” in the rules barring the credit for homes bought from relatives.
· Dependents cannot claim the credit; nor any taxpayer under the age of 18
· And more documentation is required to claim the credit. Filers must now attach a signed copy of the settlement statement to their tax returns or claims for a refund.
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Expecting a tax refund, and wondering where it is?
Just click on any of the following website links and you will be connected directly to the taxing authorities:
- Click Here to check on your Federal Tax Return Refund and complete the information indiacted.
- Click Here to check on your State Tax Return Refund and complete the information indicated.
- Click Here for more information on your Taxpayer Rights. This IRS website link could be very useful.
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| We accept Discover, Visa, and MasterCard
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At no additional cost to you, for tax prepration fees, we now accept Discover, Visa, and MasterCard. It's fast and easy.
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Nadine M Lord
Enrolled Agent
Certified Financial Planner™
Income Tax Preparation and Representation
30021 Tomas, Suite 300, Rancho Santa Margarita CA 92688
Phone: 949-766-7808 Toll Free: 800-350-1299
Fax: 949-766-7809
Mountain Communities (by appointment only)
24551 Great View Drive, Crestline CA
909-338-7180
email: Nadine.Lord@natplan.com
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