Preparing Your 2009 Tax Return in America
With 39 more days to the tax filing deadline, hopefully you are preparing your 2009 tax return. It never hurts to hear about deductions. After all, with the tax code as complex as ours, you never know what might work in your favor.
1) Deduct 2010 Haitian Relief Donations on 2009 Return
You can claim deductions for cash donations made between Jan 12 and Feb 28 2010, on your 2009 tax return. Cash donations include contributions made via check, money order, credit card, charge card, debit card, phone or text message. For donations under $250, you need either a bank record (like a cancelled check or credit-card statement) or a receipt from the charity to prove your generosity. For donations of $250 or more, you must have a receipt from the charity. For donations made by phone or text message, the IRS says a service provider bill showing the name of the charity, the donation date, and the amount is sufficient proof.
2) Claim the Making Work Pay Credit Even if You are Self-Employed
Part of the Stimulus Act is President Obama’s signature Making Work Pay tax credit (MWPC). It can be as much as $400 for an unmarried worker or $800 for a married joint-filing couple. You may be unaware that the MWPC can be claimed by self-employed individuals as well as folks with “regular” jobs. In either case, you’ll need to fill out Schedule M (Making Work Pay and Government Retiree Credits) and file it with your 2009 Form 1040. Schedule M is a brand-new form, so read the instructions carefully, and enter your rightful MWPC amount on line 63 of Form 1040. (The MWPC is phased out if your income is too high.)
3) Extra Standard Deductions if You Don’t Itemize
- $500 for state and local real property taxes, or up to $1,000 if you’re a married joint filer. The extra deduction cannot exceed the real estate taxes you actually paid last year.
- You can claim an additional standard deduction for state and local sales and excise taxes on the purchase of a qualifying new vehicle purchased between Feb. 17, 2009 and Dec. 31, 2009. You can only count taxes on the first $49,500 of a vehicle’s purchase price, but you can benefit more than once if you bought more than one vehicle during the window period.
- You can claim an additional standard deduction for personal casualty losses in federally designated disaster areas.
4) Tax Break for Supporting Struggling Relatives
If you helped out a financially struggling relative last year, you may qualify for some unexpected tax breaks. They can range from being able to use favorable head-of-household filing status (if you’re single), to a $3,650 dependent exemption deduction, to a medical expense write-off.
By
Mohit Gupta
Gupta Tax & Business Services
Phone: +1 (516) 731-2956 | Fax: +1 (718) 504-4498
www.guptatax.com
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