The IRS Deductions Blog

Posts Tagged ‘2008_tax_changes’

Question: Are you able to claim deduction on 2009 new car purchase if you do not itemize deductions?

The new stimulus has a provision for new car purchases. If we buy a new car this year, can we claim this on our taxes next year even if we don’t itemize our deductions? Also-does this work the same for pre-owned or certified pre-owned for does it have to be brand new? This year our standard deduction was way more than itemizing. Thanks for any help you can give me.

Answer: Here is a synopsis of the deduction:

•New car buyers. Purchasers of new cars and trucks will be allowed to deduct sales or excise taxes. This is an above-the-line deduction, so you don’t have to itemize to claim it.

The deduction is limited to sales tax on purchases of up to $49,500. The deduction phases out for single taxpayers with adjusted gross income of more than $125,000, and married taxpayers whose AGI exceeds $250,000.

The amount you save will depend on your state sales tax rate and the price of your car or truck. If your state imposes a 4% sales tax and your car costs $40,000, the deduction will reduce your adjusted gross income by $1,600, says tax publisher CCH.

The deduction is limited to car and truck purchases made between the date the bill becomes law and Dec. 31, says Tom Ochsenschlager, vice president of taxation for the American Institute of Certified Public Accountants. Congress “is trying to get people to buy cars right away,” he says.

Items on Amazon Right Now for Standard Deductions For 2009:

State of the Union speech should launch an all-out attack on the deficit

By the time President Barack Obama gave his State of the Union address last year, the speech felt like an old friend. It had been part of my life — from the brainstorming sessions in late November 2009 to the last minute fact-checking. I knew when all of my favorite lines were coming. That led to an awkward moment during the address when I sprang to my feet, applauding the president’s tacit …

NBR | Tax Tip 1 Two New Deductions | PBS

Question: What is the Standard Deduction Amount on Federal Income taxes?

I was wondering what is the standard amount allowed. I was also wondering if it has changed for inflation in the last 10 years? I am disabled for 10 years (almost) and I am disabled so its been a long time since I had to file federal and state income taxes. I came into some inheritance money in 2009. So I was wondering what is the standard itemized deduction for myself that uncle sam gives me? That is to say: What does the government give for one individual in terms of dollars amount? I think I recently heard it was around 5,000. Thanks! Person who addresses ALL points here gets the best rating. Peace and Prosperity!

Answer: The standard deduction for 2010 if you file as a single, is $5700. If you file as head of household, it is $8350. If you file married, joint return, it is $11,400. The standard deduction may be increased up to $1000 if you paid real estate or property tax in 2009. You must file as single if you were not married or were married but legally separated under divorce proceedings on the last day of the year. You cannot file as head of household unless you meet all three of the following criteria:

* You are “considered unmarried,”
* You paid more than half the cost of keeping up a home for the year, and
* A “qualifying person” (usually a dependent) lived with you for more than half the year.

These amounts are not money “given to you”, rather they are used as credits to reduce the taxable amount of your income.

As far as your inheritance being taxable, it depends on how you received it. If part of an estate and distributed that way, the estate tax has already been paid and you will not pay taxes on it. If given to you as a “gift” separate from the estate, you will not have to pay tax unless the gift exceeds $13,000. If you received a 1099 form in conjunction with your inheritance, some or all of the money you received may be taxable.

You should also be aware that some states impose inheritance taxes (not to be confused with estate taxes), and are usually levied on a percentage based on your relationship with the decedent.

Items on Amazon Right Now for 2009 Standard Deduction Rates:

New tax rules to remember when filing returns this year

Tax rules are changing, and taxpayers should tune in as they prepare their 2010 returns and think about the coming year.New tax benefits for individuals and small businesses will help reduce tax burdens. “The good news is that tax rates are not going u

Income Tax Changes for 2011 (2010 Tax Returns)

Question: Is there a failure to file tax penalty if no tax is due?

If a person makes x dollars, and has the same amount in legitimate deductions, and x > standard deduction+personal exemption, and the person does not file a tax return, I assume the IRS will request a statement showing the deductions. But, assuming all the deductions are legitimate, are there any failure to file penalties (or other penalties) for this person?

Answer: Maybe. It’s not whether you owe MORE taxes because too little was withheld. You MUST file if your income exceeds certain thresholds, thereby creating a tax liability. If your income is low enough, you don’t have to file.

Items on Amazon Right Now for Standard Deductions Exemptions:

It’s not too early to think about 2011 taxes

Congress established some of the parameters for the 2011 tax year even before the year began.

File IRS Tax Returns from irstaxuniversity.com

Question: Turbo Tax Worthwhile for Standard Deduction?

Would it be worth it to buy Turbo Tax if I just claim the standard deduction? Also, my dauther had a baby in Jan 07. She turned 18 in Feb 07. They both lived with us until July 2007. Can I claim them both? (She has no income so will not be filing any tax return).

Answer: Yes to turbo tax and yes your daughter and her baby are both your depend ants for 07. Happy holidays !

Items on Amazon Right Now for Standard Deduction Income Taxes:

Alimentation Couche-Tard announces its fourth quarter and fiscal 2010 results

Fiscal year

Tax Deduction Tips & Advice : How to Simplify Filing Federal Income Tax Return

Question: NC Taxes: We got married, bought house/car in 2009. File separately or together? Itemized or standard ded?

Our house payments started in June so we don’t have a full years worth of mortgage interest, but we did pay points and property taxes. Using the standard joint deduction, we wouldn’t meet it if we itemized. However, I feel like we could max out our deductions if we were to file separately and I itemized and she took the standard deduction. Is that possible?

Answer: First of all if you file separately you must both use the same type of deductions. You are able to add the property tax to your standard deduction (with some limitations) so you may well find it hard to exceed your standard deduction.

Items on Amazon Right Now for Standard Deduction And Mortgage Interest:

CBJ: Dorothy in Taxland: Overview (-Opinion)

Many people who use tax computation software don’t understand the changing structure of the U.S. tax code.

Follow the Simple Rules to Home Ownership