A Few More Ways to Save on Taxes

Posted on: April 13th, 2010 by

CPA - Taxes Due - Rockville, MDWith April 15th fast approaching, well, a mere 2 days away, I’m sure you are probably scrambling to finish up your taxes or running to your CPA in a panic with last minute documents.  Relax.  You can still file an extension if you are not prepared or are not fully aware of all the deductions you may be able to take.  For example, if you bought a new car, truck, motorcycle, or even a motor-home after February 16, 2009, you can deduct the sales tax you paid on up to $49,500 of the vehicle’s price.  You don’t need to itemize to take this special one year write-off either.  Also, if you traded in your junker to “Cash for Clunkers” to get that car, lucky you, that is another deduction.  I would advise, however, that you should speak to a tax expert if you are not willing to take the time to run the numbers to determine whether you should use this new provision or continue to itemize.

Most taxpayers don’t have enough out-of pocket medical expenses to meet the steep threshold for deducting them; but if you were out of work last year and had to pay for COBRA or other health insurance, there is a good chance that those costs may have put  you over the limit.  This may be especially important if your income fell too.  Make sure look at all of your medical bills when itemizing your deductions to see if you qualify.

There were 59 federally declared disasters in 2009.  If your house was damaged in one of them, and your homeowners insurance didn’t pick up the full bill, you have money coming back to you.  For 2009, there is no limit on what you can claim and you can retroactively apply any losses you can’t use to 2008 taxes.  Just have your accountant file amended returns to get your money quickly.

Also, if you made any energy efficient home improvements, the government thanks you by giving your more green for going green.  You can take a credit of 30% of what you spent on energy saving skylights, replacement windows,  water heaters, etc.  (Go to energystar.gov to see what qualifies)  But instead of the $500 cap that was previously on this benefit, you can take a combined $1500 for 2009 & 2010.  If you went green in a really big way, installing solar, wind, or geothermal energy in your house, you can cash in on the 30% credit with no upper limit.  If this credit exceeds your total tax bill, not to worry, you can apply the unused portion to next year’s return.

If you have any questions about any of these changes in deductions or need any help filing for an extension, contact a local CPA in Rockville to help you.  Just make sure you do so before the clock expires on April 15.



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