Some 'Good News' tax items for 2009:

These represent a sampling of new items of interest to many clients.  We would be happy to discuss all other tax provisions that impact you when we speak. 

Retirement

 

401K - contributions limit increased to $16,500 for those under 50 and $22,000 if over 50.  It usually makes sense to maximize your before tax contribution. Remember, you can usually lend the money to yourself.  And, repayments are credited back to your account (not the bank).  In view of volatile market conditions, choose your investment strategy carefully.


Traditional IRA -   No change in contribution limits here ($5,000 maximum + $1,000 if over 50).  But if you're over 70.5 you DO NOT need to take a mandatory distribution this year.

First Time Home Buyer

It's a buyers market in more ways than one.  First time home buyers can receive a credit, i.e., an outright increase in your refund, of up to $7,500.  To be repaid as $500/ year interest free over 15 years.

Home Energy Improvements

Unless Congress extends the law, 2009 is the last year to claim home energy efficiency credits of up to $500 for insulation, doors, windows, roof and boiler.

But note that substantial credits are available for installation of solar power for heating and electricity, fuel cell and wind energy.  These could save you up to 50% of the total cost of the equipment and installation.

Business
Use of Car

Standard mileage rate, which as was 50.5 cents/ mile for first half of 2008, was increased to 58.5 cents/ mile for driving during last 6 months.

Allowable depreciation was also increased.

Foreign
Earned Income

Good news to our many clients who earn income overseas.  Your foreign income that may be shielded from US taxes increased to $87,600 + over $12,200 for housing costs.