Simplified

Tax Tip #1 - Energy Credit

If you have made home improvements during 2009, I might have some valuable information for you. Certain energy efficient home improvements qualify for a 30% tax credit this year. Window, doors, insulation are just some examples, so think about all those trips to the store and start adding up your receipts. If you had to hire some of the work out, those expanses might qualify as well. Of course there are certain restrictions, make sure to contact one of our tax specialists to find out.if you qualify The credit tops out at $1,500, that’s $1,500 so keep that in mind when you meet with your accountant this year.

Energy Credit

Tax Tip #2 - First Time Home Buyer

If you recently bought a home you might qualify for a fantastic tax credit. Here are the details. The credit is based on the purchase price of your new home. If this is your first home you might qualify for up to $8,000, if you have lived in your home for more than 5 years and are now thinking of moving you might qualify for $6,500. It is important to know there are guidelines that need to be followed. For example certain income limitations and the house you would like to buy cannot be too expensive. There are other restrictions so make sure to contact one of our tax specialists to find out if you qualify.

First Time Home Buyer

Tax Tip #3 - Homestead Property Tax Credit

Thanks to the Homestead Property Tax Credit Michigan might have some extra money coming your way. Don’t let the name fool you because rent payments as well as property taxes do qualify. The credit is calculated by comparing your income to the property taxes or the rent you paid in 2009. The credit tops out at $1,200. Even if you don’t normally file a Michigan tax return, this might give you an incentive to do so this year. If you are 65 years or older the credit is calculated at a different level. Of course there are certain restrictions, so make sure to contact one of our tax specialists to find out if you qualify.

Homestead Property Tax Credit

Tax Tip #4 - Making Work Pay Credit

If you would like an extra $800 this year you might find this information interesting. The IRS has a new credit called the Making Work Pay Credit. The nice thing about this credit is that it is fully refundable so even if you don’t owe any tax you might qualify. The Making Work Pay Credit is based on your earned income so if you had income during 2009 you probably qualify. This credit does slowly get phased out once your income hits $75,000 for a single person and $150,000 for a joint couple. The maximum credit for a single person is $400 and $800 for a joint couple. There are other restrictions so make sure you contact one of our tax specialists to find out if you qualify.

Homestead Property Tax Credit

Tax Tip #5 - Qualified Motor Vehicle Sales Tax

If you purchased a vehicle during 2009, you might qualify for a special tax deduction that some people don’t know about called the Qualified Motor Vehicle Sales Tax deduction. The IRS added a deduction for sales tax paid when you purchased a brand new vehicle between February 17th and December 31st of 2009. The deduction applies to the sales tax on approximately $50,000, so in Michigan that would be about a $3,000 deduction. This deduction applies to cars, SUVs, motorcycles and motor homes. Remember, the vehicle had to be brand new in order to qualify. There are certain restrictions so be sure to contact a tax specialist to make sure you qualify.

Homestead Property Tax Credit

Tax Tip #6 - American Opportunity Tax Credit

The IRS has expanded, extended, and renamed the Hope tuition credit. The American opportunity Tax Credit as it is now called has been increased from $1,800 up to $2,500. 100% of the first $2,000 of qualified expenses is considered when calculating the credit. Plus you can now use the credit for four years of education rather than just two. Eligible expenses now include book and supplies in addition to tuition. Also, 40% of the credit is now refundable. There are income limits and other certain restrictions so make sure you contact a tax specialist for more information.

Homestead Property Tax Credit

Tax Tip #7 - Michigan Donation Credit

Michigan offers a 50% credit, again that’s a 50% credit for certain charitable donations. Cash contributions to Michigan based homeless shelters and food banks qualify. Let’s say for example you are in the 25% federal tax bracket. If you contribute $400 to a Michigan food bank your tax saving would be $300. So you are only out of pocket $100 but $400 goes to a great cause. Certain public institutions in Michigan like colleges or universities as well as public libraries qualify. In addition certain foundations will entitle you to this credit. There are limits and restrictions so make sure to contact a tax professional to find out if you qualify.

Homestead Property Tax Credit

Tax Tip #8 - Children

When it comes to children there is a lot to cover but let me try my best. The Child Tax Credit is a $1,000 per child under the age of 17. There is also the Earned Income Credit which can be as high as $5,600. Working parents with children under 13 years old may qualify for the Child and Dependent Care Credit. The IRS allows a credit up to 35% of your daycare costs. If you have one child you can claim up to $3,000 worth of daycare expenses, and $6,000 if you have more than one child in daycare. The rules on who qualifies as a child are more complicated than they should be and most of these credits are going to have income limitations so make sure you contact a tax professional to find out if you qualify.

Homestead Property Tax Credit

Tax Tip #9 - Vehicles

Vehicles are deductible in a wide variety of situations but let’s focus on the different mileage rates today. If you used your car in the act of charity during 2009 you are allowed to deduct 14 cents per mile driven. 24 cents per mile is deductible for the use of your vehicle in association with medical travel. Also, if you moved during 2009 you might be able to deduct the travel to your new home. Business mileage is the highest of all deductible travel at 55 cents per mile for 2009. If you think about it more than 50 cents per mile can add up very quickly and turn into a pretty good tax deduction. There are certain restrictions so make sure to contact a tax professional to find out if you qualify.

Homestead Property Tax Credit

Tax Tip #10 - Job Hunting Expense

The IRS allows a miscellaneous itemized deduction for expenses incurred while searching for a new job in your current line of work. Fees paid to recruiters, costs of producing your resume, as well as any advertising you might have done are all examples of expenses that qualify. In addition, local and out of town travel expenses are deductible while traveling for interviews. Your expenses are deductible whether or not you found employment. You do have to itemize in order to claim these expenses and there are income limitations that apply so make sure to contact a tax professional to find out if this deduction will work for you.

Homestead Property Tax Credit

Tax Tip #11 - IRA and Savers Credit

If you make contributions to a retirement plan you could qualify for up to $2,000 worth of tax credits. The credit ranges from 10% all the way up to 50% of what you contribute to your retirement plan. If your income is less than $55,500 for a married couple or $27,750 for a single person this credit might work for you. Even though we are now in 2010 you are still allowed to create and contribute to certain retirement plans. This is one of those few cases where you can talk it through with your tax professional and make a decision that will impact your 2009 tax return during 2010. There are certain restrictions so remember to contact one of our tax specialists to find out if you qualify.

Homestead Property Tax Credit

Featuring Gary Austin & Nikali Luke.