Listen here – Tax Tips for Individuals Read the script of the show below:
PROGRAM 1: Tax Tips for Individuals
Originally aired: Thursday, March 25 10:00 a.m. – 11:00 a.m. EDT
Introduction – Tax Mama
- Welcome and Introductions
o Thanks for joining
§ Introduce hosts:
§ Chris Wilson, Master Tax Advisor
o Wilson has been a master tax advisor with H&R Block for 7 years. He also has experience in business management, coaching and investing. He holds a Bachelor of Arts in Business Administration with a concentration in Accounting. His areas of expertise include: investments/stock options, home ownership, real estate rentals or vacation homes, healthcare expenses, non-U.S. citizens, income earned outside the U.S., small business, sole proprietor or self-employed. He resides in Shelby, NC and served as a business mentor for Duke University Fuqua School of Business summer leadership program in 2006 and 2007.
§ Leigh Mutert, CPA
Mutert obtained her MBA from the University of Kansas and is a licensed CPA in Kansas. After beginning her career with Deloitte, she took time off to raise a family. She joined H&R Block in 2002 where she has successfully worked in roles ranging from tax professional to Business Development for the online products group. She is currently the Community Manager in the Social Media Marketing Department.
§ My name is Eva Rosenberg, Enrolled Agent
- I am the Internet’s TaxMama at TaxMama.com – author, nationally syndicated tax columnist at Dow Jones’ MarketWatch.com. I have decades of tax experience, starting with National CPA firms and spending the last 10 years answering your questions at TaxMama.com .
- Brief overview of topics to discuss
o Key tax law changes
o What to know if you were unemployed and looking for a job in 2009
o Critical tips for last minute filers
- We encourage questions – this is an interactive program
Changes to be aware of for 2009 – Tax Mama to introduce topic
- Important to be aware of changes as they could lower tax liability or lead to larger refund
o 300 tax law changes this year; affect many individuals including those who:
§ Bought a home
§ Paid for college or high education courses
§ Made energy efficient improvements to a home
o Not enough time to get into all of the changes but will outline those that are most likely to impact individuals
- Real Estate – Tax pro #1 – (Chris Wilson)
- Homebuyers will benefit greatly with tax relief thanks to changes made to the First-Time Homebuyer Credit:
§ EXTENDED until April 30, 2010
§ EXPANDED to now include repeat homebuyers – which could mean a credit of up to $6,500 if you purchased the house after November 6
§ BUT Those who are claiming this credit will not be able to e-file
o Mortgage Debt Relief
§ For those faced with foreclosure – Mortgage Forgiveness Debt Relief Act may help
§ Extensions protect eligible taxpayers from paying federal income tax on as much as $2 million of debt forgiven on a principal residence
- Education – Tax pro #2 – (Leigh Mutert)
o New credit to watch out for: the American Opportunity Credit (AOC)
§ Expands the existing Hope Credit to a broader range of taxpayers, including many with higher incomes and those who owe no tax
§ Allows the credit to be claimed for four post-secondary education years instead of two
§ Maximum annual credit is $2,500 per student
§ 40% refundable
- Going Green – Tax Mama
o “Going Green” is good for the environment, but what most people don’t know, is that going green could save money at tax time
- Unlimited Tax Credits of 30% of the cost of Solar Energy units for electricity or water heating, small wind energy. Note – unlimited means, 30% of the full cost of the equipment.
§ property, geothermal heat pump property, and fuel cell property.
- Tax Credit up to $1,500 for 30% of the cost of insulation, exterior doors & windows designed to reduce , certain roofs that meet Energy Star requirements.
- Key dates to note:
- February 17, 2009 – purchases must be made after this date .
- June 1, 2009 – You may rely on manufacturers certifications issued before February 18, 2009. After that, you need to ensure the items meet enhanced International Energy Conservation Code (IECC) specifications.
o In both cases, check with your states and local governments. You may find corresponding credits, rebates or incentives from your city, state or utility.
o Charity – Tax pro #1 – (Chris Wilson)
o Following the earthquake that struck Haiti, President Obama signed a bill that allows charitable contributions to Haiti relief efforts to be deducted on 2009 tax returns, rather than waiting until 2010
§ Two key provisions:
- The contribution must be made from Jan. 12 to Feb. 28
- Contribution must be made in cash for the relief of victims in areas affected by the earthquake in Haiti, to a U.S. charitable organization that is allowed to receive deductible donations.
§ Americans who donated via text message should keep the phone bill as substantiation
o Similar bill introduced in support of the earthquake that struck Chile – if passed this bill would enable taxpayers to deduct charitable contributions made before April 15
§ If passed, bill would extend deadline for donations to Haiti until April 15 – did the bill pass yet?
- Automobiles – Tax Mama
o With Cash for Clunkers many individuals bought new vehicles
§ Vehicle sales and excise tax deduction
§ Folks who tithe or make generous donations to your religious community, be sure to get all receipts for your donations BEFORE you file your tax return. Put your return on extension if you don’t have the receipts for the correct amount.
§ Note: Payments you make to your schools or religious communities for tuition, grocery scrip, or to buy religious supplies are not donations. Please don’t deduct them.
Tips for those who were unemployed or looking for a job in 2009 – Tax pro #2 to introduce topic – Leigh Mutert
- 1 in 10 Americans were unemployed in 2009
o Survey by The Tax Institute states that 80 percent of Americans do not know if you have to pay taxes on unemployment benefits
o Here to help set the record straight
- Unemployment benefits ARE taxable income
o Recovery Act exempts the first $2,400 of unemployment benefits earned in 2009 from federal taxes – anything over that is taxable
§ Act added extra $25 per week to unemployment checks
§ Provided 65% COBRA subsidy for those who qualified
- Job hunting expenses are deductible – Tax Mama
o Keep track of your job hunting expenses – e.g., coaching, moving, mileage driving to interviews, resume printing, etc.
o Relocation expenses for a new job also are deductible
o Commuting to/from work is not a deduction.
o COBRA payments may qualify for medical expense deductions – save your receipts
o [TaxMama adds additional tips]
o Note: Your boss gets reimbursed for their COBRA contributions. So don’t let them talk you out of participating in the COBRA subsidy. I am hearing from employees of small companies that they are not getting the correct information from their employers when they leave. The Department of Labor has detailed information for you on their website – just go to www.dol.gov and you will find a link to current information right on the website.
Top tips for last minute filers – Tax pro #1 to introduce topic – Chris Wilson
- Let’s face it, doing your taxes is stressful and frustrating process – all of the changes for this year certainly don’t help
- Outlined some last minute tips to help last minute filers take advantage of all the credits and deductions available to them: (H&R Block tax pros to split in half)
o Stop procrastinating: Even if you owe the IRS, the payment is not due until April 15, regardless of when you file your return.
o Review your 2009 tax year for important life changes: e.g. newly married, new baby, new dependent, education costs, new job, job displacement or a move
o Consider your options: Number of reputable online tax preparation products that can help guide you through a return or visit local tax preparer
o Be aware of tax law changes: may qualify for additional credits and deductions you are not aware of
o Be sure to e-file: It’s always free and you can receive your refund within 8-15 days with direct deposit
o Know the pros and cons of filing for an extension: filing an extension does not extend the time to pay a tax liability; it gives you an extension until October 15 to file your return
- [TaxMama adds additional tips]
o Even if you can’t pay – file a tax return or an extension. The penalties for not filing, or filing late without an extension are hefty.
o Before filing, proof-read your tax return carefully – especially if you did not prepare it yourself. Make sure entries are on the correct line, all your income is included, and you recognize all the expenses shown on your tax returns.
o If you have a business, put your tax return on extension even if it’s ready to go. You may learn some tips today in Part II of this show that you may want to implement.
Wrap Up – Tax Mama
- Thanks for joining us
- If you have any additional questions – get them answered for free – H&R Block is hosting 24-hour Tax Talk Line today – at 1-866-HR BLOCK or 1-866-472-5625 – in English or Spanish. Call or e-mail questions or submit them online at Get it Right Community –
- To Ask TaxMama, please visit TaxMama’s family at www.TaxMama.com – post your questions in the TaxQuips forum – and we’ll send you the Internet’s premiere free daily podcast.
- In fact, tomorrow, you will be able to find an outline of today’s show at TaxMama.com under Special Reports
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