9/18/08

The IRS has granted tax relief in the form of deadline extensions and penalty abatements in regard to Hurricane Ike. Please see our HURRICANE IKE page for details as to who qualifies for relief, and relief details.  A brief description of the regular casualty loss deduction rules can also be found on our HURRICANE IKE page.

8/1/08

This new credit included in the Housing Assistance Tax Act of 2008 sounds great but while it is still a good deal, it's not quite as great as it sounds.  Qualifying first-time homebuyers who make their purchase between April 9, 2008 and July 1, 2009 can take a credit of 10% of the purchase price up to $3,750 for Single taxpayers or $7,500 for married couples filing joint returns.  The credit begins to phase out for those with incomes over $75k/$150k for Singles/Joint return filers.

Unlike other tax credits, this one must be repaid in equal payments over 15 years.  The good news is that this "loan" is interest free.

HOWEVER, if you sell the home before the 15 year period ends, the unpaid remainder is due and payable immediately!

8/1/08

Up until now, many homeowners have been unable to take advantage of the itemized deduction for property taxes paid on their home because their total itemized deductions were less than their standard deduction, usually due to either not having a mortgage or a relatively small amount of mortgage interest.

The Housing Assistance Tax Act of 2008 gives taxpayers in this situation some relief--but only for the 2008 tax year.  The 2008 standard deduction for homeowners is increased by the amount of property tax paid, up to $500 for Singles or $1,000 for joint returns.

7/1/08
In response to the soaring price of gasoline, the IRS has announced a large increase in Standard Mileage Rates for business, medical and moving mileage deductions effective July 1.  The standard rate for miles driven for charitable purposes remains unchanged as the IRS does not have authority to change it (that is up to Congress).

Mileage Rate Changes

For comparison, 2007 standard mileage rates were 48.5 cents for business and 20 cents for Medical and move-related mileage.

5/12/08

John Beck, owner of Beck McCarthy and Associates in The Woodlands, Texas passed away on Friday, May 2, 2008.  Mr. Beck was well known in the Houston area as a tax accountant specializing in preparing tax returns for car salesmen and other automobile dealership employees. He is survived by his wife Debra McCarthy-Beck and his children Tanya Kane, John, Kalen and Tyler Beck.

02/22/08
The much publicized Economic Stimulus Package is now law. Most single taxpayers with incomes under $75,000 will be getting $300-$600, while couples with incomes under $150,000 would get $600-$,1200.  Rebates for those earning more are reduced by 5% of the excess income. There is an additional $300 per dependent child who was under 17 as of 12/31/07. There is no limit on the number of dependent children.

Even individuals who did not pay income taxes in 2007, but earned at least $3,000 (from Social Security or veterans disability benefits for example) would get a $300 check.  Individuals who are claimed as dependents on another taxpayer's return are not eligible to receive their own payment (though in the case of a child, the parent may receive the additional $300 instead).

Rebates should be mailed out starting in May 2008 and will be based on taxpayers' 2007 returns, which are not due until April 15, 2008. If you are actually due a larger rebate than that calculated based on your 2007 return, the difference will be included in your 2008 tax year refund.  If the rebate check was too much (say you had one less dependent in 2008), you will not have to repay the extra money you received.

The IRS has updated it's tax rebate frequently asked questions page earlier today.  More detailed information can be obtain by going to http://www.irs.gov/newsroom/article/0,,id=179181,00.html

01/14/08

The IRS has tightened the requirements for deducting your charitable contributions beginning with Tax Year 2007.  Under the new rules, you cannot deduct a cash contribution of any amount unless you keep either a bank record (cancelled check, bank statement showing charity or church's name, date, and amount of gift), credit card statement, or payroll deduction records.  "Reliable written records" kept by the taxpayer are no longer acceptable.

1/8/08

Private Mortgage Insurance in new mortgages (including re-financings) signed in 2007-2010 may be taken as an itemized deduction by most taxpayers with an Adjusted Gross Income of less than $100,000.  The mortgage may be on either your principal residence or a second home, but the mortgage proceeds must have been used to buy, build, or improve the home.  Home Equity loans where proceeds were used for other purposes don't qualify.

12/20/07
President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007 which helps homeowners who renegotiated their mortgages or were foreclosed upon in 2007 (or will be in 2008 or 2009).  Usually, debt forgiveness of all types (mortgages, credit cards, etc.) is counted as taxable income.  However, due to the subprime mortgage crisis, this change (which applies only to mortgage debt on the taxpayer's primary residence) excludes such debt forgiveness from taxable income. The exclusion is limited to $2 million.