Since many are filing (or have filed) their taxes, this may be a good place to post some useful tax tips that folks may not think about (or have accountants to think for them). For example: First time homebuyers may qualify for a $7500 tax credit (or 10% of the home's value, whichever is cheaper). This is essentially a $7500 interest fee loan that you have to pay off over 15 years ($500/year) starting 2 years after you receive the credit. There are some qualification issues, but I suspect most first time buyers would qualify. Incidentally, I believe they are trying to bump this up to $15,000 (or 10% of the price of the house) in the stimulus package. You can see more here: http://www.irs.gov/pub/irs-pdf/f5405.pdf
If you itemize you can use deduct your sales taxes paid. If you didn't save every single receipt from the year you can use a handy chart the IRS provides. For major purchases, such as a car or expensive jewelry, you can actually add the sales tax to the IRS chart amount. Also, if you purchased a home, not only can you deduct your interest expense, and perhaps get the tax credit (may be 15K if the legislation goes through as mentioned above) but you can deduct any points you paid on your mortgage when you purchased it. Don't forget to deduct property taxes as well. Also: one of the biggest tax mistakes newbie filers make if they are taking the standard deduction: you get the standard deduction AND your personal exemptions. Many people leave out the personal exemptions when they take the standard deduction. Turbo tax grabs them both for you if you use it. Possible Stimulus package: Two major tax credits might make it through the stimulus package for either this year or next. 1. The 15,000 credit on new home purchases. Changes to the current 7,500 credit are that it won't have to be a first time home AND it won't have to be paid back. Also, it is possible it might be retroactive back fairly far. 2. There is talk of a sizeable tax credit for new car purchases. Something like 6 or 7% of the amount you paid for your car up to $49,500 or something like that with an income cap of $125,000 for single and $250,000 for married folks.
Don't file on April 14th. File on the 15th. Make it more exciting! Arrive at the Post Office Station at 11:59 p.m. and demand they take your return.
The more badly you screw up your taxes, the more likely you are to get a great government job, like Treasury Secretary.
If a spouse did not have income in 2008 can they be counted as a dependent or get some sort of deduction for this?
She isn't a dependent, but you do get to claim the personal exemption. Her not having income doesn't change anything.
To clarify this: You don't actually have to be a first-time home buyer. The IRS meaning is that you or your spouse cannot have owned a house in the 3 years prior. So you could still qualify. The $15,000 was added to the Senate version of the stimulus bill earlier today. The original proposal had asked for it to be extended thru the end of the year and was to make it where you don't have to pay it back. I have not seen any information since it was added saying if either of those two things were part of the amendment. This of course would be for all home buyers.
You can only deduct the points in full or up to the amount you paid at closing. If you financed the closing costs, then you have to amortize the points over the life of the loan. Points usually appear as Loan Origination Fees on your HUD-1. This is a common error I see even among CPAs. Don't forget that you did pay some cash up front via earnest money. This was another thing added to the Senate Stimulus Bill. If it passes you will also be able to deduct interest on your car. The biggest advice I have for 2008 filers, is that if you own a home, but don't have enough to itemize, you may qualify for a higher standard deduction. For 2008 only, you can add the amount of your property taxes up to $500($1000MFJ) to your regular standard deduction of $10,900.
As the law is today, you would need to purchase the house prior to July 1 of this year and you could essentially get a $7500 interest free that you would pay off at $500 per year for 15 years starting 2 years after you get the loot.
Under the current law, you have to do it by July 1st. Remember also that you won't actually get the money until you file your return in 2010.
I found the following web sites which indicates if the $15,000 is passed (as currently in the stimulus package), it does NOT have to be repaid. http://personal-tax-planning.suite101.com/article.cfm/15000_homebuyer_tax_credit_senator_isakson
Why is that? My taxes are pretty basic. I've been using taxslayer for several years and e-filing with them without problems...that I know of.
Where the hell do you get that from? When you e-file your return, the IRS says you are 99 percent less likely to receive any notices from them.
