Job Seekers tax breaks.

Looking for job? Well, you may get some tax breaks from the IRS.

1. Expenses related to job serach are deductible if you are seeking employment in the same occupation, but not on another job field.
2. If you pay someone (agency fee) to help you find a job, these are deductible expenses, provided you did not get reimburse by your employer.
3. First time job seekers gets no tax breaks.
4. What expenses are deductible? mostly those to gain you employment (e.g., typing resumes, stationary, travel expenses and qualify incidentals, etc.)
Source: IRS

Starting a new business? Please consider these...

1. Selection of the business entity or form of organization will determine the taxes you will pay and the paperwork to file with the IRS.

2. Generally some business entities requires to have an EIN.

3. You may choose your tax year: fiscal or calendar year. Most people choose a calendar year, but is that the only available choice?

4. Do you have time to do your own books or have your books be prepared by a professional. You may want to figure out the time it would take away from running your business and what records to keep.

5. Have you figure out what method of accounting is best for you? You have the choice of preparing your books under the cash, accrual or hybrid method.

6. Can you run your business from your home? Not all business can be run in hour principal residence.

7. How do you know when you need financing?

(Source: IRS)

Tax rates on qualified dividends

Do you know that your taxable income thresholds will determine if your qualified dividends are taxed at a 0% tax rate.  Yes, that is not a typo, no tax at all.  

Source IRS.

Credit available for first time homebuyers

Are you a first-time homebuyer?... You could qualify!  You must not own a main home during the prior three years.  The credit could go up to $7,500.  However, you must have bought your home by the applicabe date to qualify, even if you purchase your home in in the first part of 2009. 

Source IRS.

Recovery Rebate credit

The economic stimulus payment we receive last year is tax free and should not be reported on the 2008 tax return.  However, this rebate could affect your Revovery Rebate Credit.  How so?  A tax payer may qualify for the credit if he/she did not get a stimulus payment or had a child last year.  

2009 changes

Key changes affecting 2009 returns, filed by most taxpayers in early 2010, include the following:

• The value of each personal and dependency exemption, available to most taxpayers, is $3,650, up $150 from 2008.
• The new standard deduction is $11,400 for married couples filing a joint return (up $500), $5,700 for singles and married individuals filing separately (up $250) and $8,350 for heads of household (up $350). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
• Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $67,900, up from $65,100 in 2008.
• The maximum earned income tax credit for low and moderate income workers and working families with two or more children is $5,028, up from $4,824. The income limit for the credit for joint return filers with two or more children is $43,415, up from $41,646.
• The annual gift exclusion rises to $13,000, up from $12,000 in 2008.

Interest Rates Drop for the First Quarter of 2009

The Internal Revenue Service today announced in Revenue Ruling 2008-54 that interest rates for the calendar quarter beginning Jan. 1, 2009 will drop by one percentage point. The new rates will be:

• Five (5) percent for overpayments [four (4) percent in the case of a corporation];
• Five (5) percent for underpayments;
• Seven (7) percent for large corporate underpayments; and
• Two and one-half (2.5) percent for the portion of a corporate overpayment exceeding $10,000.
  

(Source: IRS)

IRS Speeds Lien Relief for Homeowners

The Internal Revenue Service an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home.

If taxpayers are looking to refinance or sell a home and there is a federal tax lien filed, there are options. Taxpayers or their representatives, such as their lenders, may request that the IRS make a tax lien secondary to the lien by the lending institution that is refinancing or restructuring a loan. (Source: IRS)

HOW TO CLAIM CASUALTY LOSSES

A casualty loss can result from the damage, destruction or loss of your property from any sudden, unexpected, and unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption.

If your property is not completely destroyed, or if it is personal-use property, determine your loss from a casualty by first figuring the decrease in fair market value of your property.

If the property was held by you for personal use, you must further reduce your loss by $100. The total of all your casualty losses of personal-use property must be further reduced by 10% of your adjusted gross income.
If your business or income-producing property is completely destroyed, the decrease in fair market value is not considered.
If your main home, or any of its contents, is damaged or destroyed as a result of a disaster in a Presidentially declared disaster area, do not report any gain due to insurance proceeds you receive for unscheduled personal property, such as damaged furniture, that was part of the contents of your home.
You can choose to postpone gain from any other insurance proceeds received for your main home or its contents if you purchase replacement property within four years after the close of the first tax year in which any gain is realized. For this purpose, insurance proceeds received for the home or its contents are treated as being received for a single item of property, and any replacement property you purchase that is similar or related in service or use to your home or its contents is treated as similar or related in service or use to that single item of property. Again, postponement of gain is only available if the amount you spend on replacing or repairing your property is equal to, or exceeds, the insurance proceeds you receive. Otherwise, you must recognize gain to the extent that the insurance proceeds are more than the cost of your replacement property. Renters qualify to choose relief under these rules if the rented residence is their main home.
If your home is located in a Presidentially declared disaster area and your state or local government orders you to tear it down or move it because it is no longer safe to live in, the resulting loss in value is treated as a casualty loss from a disaster. Figure your loss in the same way as any other casualty loss of personal-use property. The State or local government order must be issued within 120 days after the area is declared a disaster area. This are the general rule, and they are exceptions. (Source IRC.)

Hurricane IKE disaster relief

IRS:
IF you live in a IKE disaster area:
Tax return filing, tax payments, and certain other acts are postponed ‘til Jan 5, 2009. Applies to individuals as well as businesses. However, you must inform the IRS before taking the relief.
Casualty losses can either be claimed this year or on last year tax return, you have the option. Call your accountant which alternative benefits you the most.
State of Texas:
If you live in the IKE disaster area:
Labor charges for repair or remodeling performed on residential property are not subject to sales tax. However, materials used during the repair or restoration are taxable, even in a disaster area. Make sure that the contractor calls for a single charge that includes materials and labor.
Motel and Hotel taxes suspended for 14 days beginning Sept. 8, 2008.