Business Provisions of the American Recovery and Reinvestment Act of 2009 (ARRA)
FS-2009-11, May 2009 — ARRA provides a number of tax incentives for businesses.

Energy Provisions of the American Recovery and Reinvestment Act of 2009
FS-2009-10, April 2009 –The American Recovery and Reinvestment Act of 2009 (ARRA) provides energy incentives for both individuals and businesses.

EITC Eligibility Rules Outlined
FS-2009-9, January 2009 – The Earned Income Tax Credit (EITC) is a tax credit for people who work but do not earn high incomes.

Tax Law Changes Related to National Disaster Relief
FS-2009-8, January 2009 — The National Disaster Relief Act of 2008, Subtitle B or Title VII of the Emergency Economic Stabilization Act of 2008, signed into law on Oct. 3, 2008, as Public Law 110-343, provides tax relief for victims of federally declared disasters occurring after Dec. 31, 2007, and before Jan. 1, 2010.

How to Choose a Tax Preparer and Avoid Preparer Fraud
FS-2009-7, January 2009 — Taxpayers should put as much care in choosing a preparer as they would a doctor or lawyer.

IRS Offers Free Tax Help
FS-2009-6, January 2009 — Find out what resources are available online, by phone and in-person.

E-File and Other Electronic Options for 2009
FS-2009-5, January 2009 — Learn more about what’s new with electronic tax filing for 2009.

The Official Internal Revenue Service Web Site Is IRS.gov
FS-2009-4, January 2009 — The IRS Web site address does not end in .com, .net or .org.

Recovery Rebate Credit Is for Individuals Who Missed Last Year’s Economic Stimulus Payment
FS-2009-3, January 2009 — Credit largely follows rules of the 2008 stimulus payments.

Tax Credits Provide Funds for First-Time Homebuyers, Childcare, Education and More
FS-2009-2, January 2009 — Tax credits can boost a tax refund.

Highlights of 2008 Tax Law Changes: Tax Breaks Renewed, Recovery Rebate Credit, Homeowner Relief
FS-2009-1, January 2009 — Notable tax law changes for individuals.

News Release and Fact Sheet Archive
News releases and fact sheets from November 2002 forward and an archive of news releases and fact sheets in PDF format back to 1997.

1. Beginning July 1, 2008, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) are: * 58.5 cents per mile for business miles driven; * 27 cents per mile for all miles driven for medical or moving purposes; and * 14 cents per mile for all miles driven for charitable purposes.

 

2. If your tax refund was too high or too low, adjust your withholding so it doesn’t happen again next year. You can file a revised Form W-4 with your employer at any time to increase or decrease the number of exemptions you claim. The more exemptions you claim, the less tax your employer withholds from your wages, resulting in a smaller refund. Decreasing the number of exemptions results in more withholding and a larger refund.

 

3. It doesn’t appear that a college education will get cheaper any time soon. Look into establishing a qualified tuition plan for your children. The earnings in the account grow tax-free. As long as the funds are spent on qualified education expenses, there are no tax consequences. Plus, there may be an added tax benefit at your state level.

 

4. Are you planning on making any substantial gifts? Talk to your tax preparer first. Gifts with values exceeding $12,000 must be reported to the IRS.

 

5. Not only will you save money at the pump if you buy a hybrid vehicle, you may be eligible for a credit on your income tax return.

 

6. If your child has earned income from a summer job, you may want to consider opening an IRA for him or her. There is no minimum age for contributing to an IRA. The only requirement is that the person making the contribution has earned income and has not reached age 70½.

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What’s deductible and what’s not?

While there are benefits to refinancing your home mortgage, most refinancing costs are not deductible on your tax return. There is one exception, however. The amount you pay for points, or prepaid interest, may be amortized over the life of your new loan. Although this might not amount to much when you spread it out over 15, 20, or 30 years, don’t file away your closing papers quite yet.

When the note is paid off, you may deduct the remaining interest attributed to the points you paid the first time you refinanced. However, according to the IRS, refinancing must be done at a different lender. In addition, the closing costs may reduce the taxable gain when you sell your home.

You may not have to include it in income

When you are liable for a loan but can’t repay it, some lenders will forgive the debt. What many borrowers don’t realize is that this cancellation of debt results in taxable income in the year of forgiveness. The lender usually will issue a Form 1099-C to report the cancelled debt. If you receive one, don’t ignore it. Be sure to give it to your tax preparer and discuss the circumstances surrounding the loan.

If you have cancelled debt but are bankrupt or insolvent, you may exclude the income on your tax return. To prove insolvency, your liabilities must exceed the fair market value of your assets immediately before the debt discharge. The amount of forgiven debt that can be excluded cannot be more than the amount your liabilities exceed the value of your assets.

In light of the current mortgage crisis, Congress has provided more relief for borrowers who couldn’t pay their mortgages. If you have forgiveness of debt on the mortgage of your qualified principal residence (usually due to foreclosure), you don’t have to recognize cancelled debt. The maximum amount of debt forgiveness eligible for exclusion is $2 million. This relief is available for tax years 2007 through 2009.