tax planning institute
Tax Planning For 2010
Stay Organized
Although being aware of tax changes will certainly serve you well, the information will do you little good without the receipts and documentation. Throughout 2010, keep a filing folder or cabinet neatly organized with important receipts, documents, and tax information, which will be needed, come tax time.
Childcare Tax Credit
The childcare tax credit is currently set to $1,000 for each qualifying child, provided guardians do not exceed the income limits. However, President Obama recently said, at his State if the Union address, that he was planned to double the childcare tax credit to make life easier on struggling parents given the rough economy. While it is too soon to tell when or if this proposal will go in to place, it is definitely a credit for parents to look out for.
Estate Tax Changes
If you had a loved one, who would normally be subject to estate taxes, pass away in 2010, it is important to know that these taxes will not apply this year. If you are the heir or one of the heirs, it will lie on you to make the proper tax moves with the inheritance. On the other hand, if you have a will, you may want to make temporary changes to your will for the year if you planned donate a larger portion to charity or avoid over taxation, which you would normally be subject to. Remember to reverse the changes next year, as the estate tax will be higher than ever when it returns. These changes are quite drastic and if you are confused, you may want to consider hiring an estate tax attorney to make sure you make the right choices.
Making Work Pay Errors
When the Obama administration instituted the making work pay credit last year, many working Americans were happy to receive an additional $400 by the end of 2009 on their pay stubs. However, a major error was overlooked in the distribution, and some taxpayers who had more than one job and received the $400 for each job. The credit is was intended to apply to only one job. Taxpayers who experienced this error will be required to fill out a schedule M form in 2010 to return any overages. The credit will also be given this year, but the error is unlikely to repeat itself. However, whereas last year’s credit was distributed over 9 months, this year’s credit will be distributed over 12 months, so expect a smaller bump to your paycheck
Roth IRA Changes
With the income limits for converting an IRA to a Roth IRA eliminated for 2010, a great potential retirement saving move has been opened to many Americans who did not qualify for it before. However, be aware of conversion costs in the form of previously untaxed amounts. Luckily though, when the change was made, lawmakers put some thought into this and are allowing taxpayers to pay half of the conversion costs in 2011, and the other half in 2012.
Energy Efficient Upgrades
If you were planning on making energy efficient upgrades to your home, you may want to do so now, as the tax savings approved in last year’s stimulus bill are set to expire at the end of the year. The highly beneficial changes allow you to claim up to $1,500 in credits, and possibly even more if you plan to install solar panels to your home.
About the Author
The Tax Lady Roni Deutch and her law firm Roni Deutch, A Professional Tax Corporation have been helping taxpayers across the nation find IRS tax relief for over seventeen years. The firm has experienced tax lawyers who can fight IRS tax liens on your behalf.
Obama Tax Plan analyzed by the Urban-Brookings Institute has a line item for revenue raisers, help?
Ok, in the Urban-brookings institute analysis, the Obama tax plan includes a line item for revenue raisers, which is listed as an unverifiable dollar amount provided by the Obama campaign. Any idea what that is? The amount is significant and when you consider the two plans without it, the gap btween the two in the overall increase to the deficit narrows considerably.
Wow.. you are a genius!!
Nanny Tax – Alexis Martin Neely – Better TV
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