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2008 Tax Filing Season

At Gilman Ciocia, you’ll have a personal tax team at your side working for you throughout the year. Taxes can be a complicated business and we strive to educate all of our customers on the laws, credits and deductions each and every year.

Below is a list of existing tax advantages, and new tax credits which have come about from the recent government bailout plan or ‘Emergency Economic Stabilization Act’ as it is now officially called:

There is a new credit for first-time homebuyers.  This new credit provides a maximum tax credit of up to $7,500 or ten percent of the purchase price of the home for eligible first-time buyers who bought a house between April 2008 and June 2009. It is important to note that this particular credit operates much like an interest-free loan, because it must be repaid over a 15-year period.

The IRS provides special relief provisions which may reduce or eliminate the tax bite for those who have lost their homes. The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief. This provision applies to debt forgiven in 2008 or 2009. 

A new tax credit worth between $2,500 and $7,500 now exists for plug-in electric motor vehicles.  The credit will phase-out after 250,000 of these vehicles are purchased in the U.S.

There is also still time to purchase fuel-efficient hybrid, electric, and diesel cars and trucks to get tax credits worth as much as $4,000 in 2009. Note that you must be the original purchaser of the new qualifying hybrid car to claim the credit and leases do not count.

There is an extension of the current energy property credit of up to $500 for people who buy energy-saving products for the home such as windows and insulation.

Newlyweds, be sure to check your withholding status to avoid owing more taxes than expected next April.  Also, brides, if you are taking your husband’s name, be sure to officially change it with the Social Security Administration in 2008 to avoid delays in 2009 by having to verify your identity.

Once again (until 2009), seniors over the age of 70 ½ may draw $100,000 from their retirement plans and contribute it to their favorite charities.  The contribution must be made directly from their retirement plan.

When making charitable contributions, be sure to gather all receipts as proof of giving to charities in 2008. Cash donations must now be supported by confirmation from the charity itself, or by bank records or credit card statements. 

The Higher Education Tuition Deduction has been extended to Dec. 31, 2009 and allows taxpayers to deduct some costs of higher education expenses.

There has been another AMT Patch. The Alternative Minimum Tax exemption amounts are $69,950 for married couples filing jointly, $34,975 for married couples filing separately, and $46,200 for single taxpayers.

Now is the time to maximize 401(k)s, or IRAs/SEPs: If you are 50 years or older, you are now allowed to contribute up to $6,000.

The sale of investments: Timing a sale to reap the most tax benefits should be decided before taking action.  Take advantage of the $3000 loss allowed on your tax return each year if you have losers in your portfolio or be sure to take unrealized losses if you have sold some assets at a profit this year.

 

If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.

Securities offered through Prime Capital Services, Inc (PCS). Member FINRA/SIPC Investment Advisory Services offered through Asset & Financial Planning, LTD. (AFP), Gilman Ciocia, Inc., Prime Capital Services, Inc., and Asset & Financial Planning, LTD. are affiliated entities. PRIVACY STATEMENT