Posts tagged 2009 taxes
There are a couple new tax and financial planning issues affecting our clients for the 2009 tax season, so be aware:
1. Every disaster needs a new tax law…apparently.
We, like the rest of the world, were saddened by the tragedy of the Haiti earthquake, and, like so many, were inspired to donate what we could. As accountants, however, we also realized this created a new issue for the upcoming tax season. They do make tax planning a challenge. For an analysis of deducting Haiti donations made in 2010 on your 2009 tax return, look at page 3 of our newsletter. This is hot off the government presses and doesn’t apply to any of the other worthwhile causes out there.
2. Another developing issue: if you’ve worked diligently with your attorney to develop an estate plan, congratulations, that plan may now be useless — at least for the time being.
As of January 1, 2010 the estate tax has been temporarily repealed. Don’t worry, though; it comes back as of January 1, 2011. Congress may extend the tax retroactively, but who knows. You may want to contact your attorney to see if a fix to your plan is warranted.
There may be more retroactive tax laws to follow, so stay tuned!
On a more positive note, wouldn’t it be nice if the Kansas Legislature actually considered and passed a repeal of the Kansas Income Tax? I understand that other taxes would be expanded to cover the shortfall, but I am growing tired of Kansans moving to Texas, Florida or Nevada to avoid the Kansas Income Tax. Even boring accountants can dream.
The Kansas Department of Revenue warns that it may take up to 16 weeks to process state tax returns filed on paper this year due to budget cuts. They will also not be sending paper forms to libraries, post offices and other locations for the public to pick up. Instead, the state is encourages taxpayers to file electronically to save on processing costs.
Processing paper returns and sending out refunds used to take six to eight weeks, but the process is expected to last up to four months this season.
Each year, the IRS announces the most common blunders that taxpayers make on their returns. One of the most prevalent – every single year – is forgetting to enter Social Security numbers on the top of returns, so double-check those forms!
Another yearly occurrence done by millions of taxpayers is overpaying their taxes by overlooking money-saving deductions. Don’t give up your hard earned money, make sure you know about the potential deductions available to you:
1. State sales taxes.
2. Reinvested dividends.
3. Out-of-pocket charitable contributions.
4. Student-loan interest paid by Mom and Dad.
5. Moving expenses to take your first job.
6. Military reservists’ travel expenses.
7. Child-care credit.
8. Estate tax on income in respect of a decedent.
9. State tax paid last spring.
10. Refinancing points.
11. Jury pay turned over to your employer.
12. Property-tax deduction for nonitemizers.
13. Casualty-loss deduction for nonitemizers.
14. Hope credit for college juniors and seniors.
15. Making Work Pay credit.
16. Sales-tax deduction for new vehicles.
17. Credit for energy-saving home improvements.
18. Break on the sale of demutualized stock.
19. Home-buyer credit.
Want more details, check out this article from Kiplinger. Have questions? Contact us at CGP and we’ll be happy to help you ensure your finances are protected.