Memphis attorney Vincent Perryman discusses Tax Preparation for 2009 taxes with Gus Wilson and what has changed since last year. They discuss some new laws that have been created or extended for this year. The sales and excise tax paid on qualified vehicles is now deductible. It can be added in your standard tax deduction. If you are in Tennessee and you already take the local sales tax deduction it cannot be included. The vehicle has to be new and there are other limitations so consult a Memphis Tennessee Certified Public Accountant. The HOPE tuition credit has been expanded. It is offered to students attending college in their first 2 years. It is now called the American Opportunity Credit. Instead of an 1800.00 deduction it is now a 2500.00 deduction and can be applied for 4 years instead of 2 years. If you don't qualify for the American Opportunity credit there is also the lifetime learning credit. It is usable for any one year while a student is in college. If a Memphis resident has a student in college they receive the 2500.00 deduction not the student. The Making Work pay credit is something that is already included automatically to all U.S. citizens. It is a credit that is causing some problems. Memphis Tennessee individuals should consult a Memphis Certified Public Accountant in order to determine if it will negatively affect you. An additional tax credit is a Qualified Energy Efficient Home Improvements. This includes the purchase of energy efficient home appliances which is a 30% of the purchase price for the 2 years in aggregate up to 1500.00 on your principle residence. The appliance has to be certified. These certified appliances can be found at http://www.energystar.gov. Other additional credits can be applied to solar heaters and solar products. You can write off 30% of the cost. The energy efficient appliances can be in any of your residents not just the primary residents.
When claiming energy efficient tax credits be aware if you are using your home for business purposes. There are some regulations that need to be followed for commercial and residential. There are special regulations for fuel cells as opposed to solar cells or wind reclamation energy. Consult a Memphis Certified Accountant when deciphering the tax credits. New tax laws have made it easier for a Memphis individual to convert a ROTH IRA to a Traditional IRA. This only benefits a handful of people. This is geared towards Memphis residents who anticipate their tax rate to be at or higher when they retire. A Traditional IRA is pre taxed money and a Roth IRA is taxed before it is contributed to the retirement fund. If the amount you will make after you retire is greater than the money before you retire it is better to have your contributions taxed before putting them in the retirement fund. Unemployment benefits for Memphis residents have been allowed to receive up to 2400.00 nontaxable. The Child Tax credit eligibility has been increased so more people qualify for it. The Home buyer tax credit has 3 laws attached to it. The first part covers the time frame from 4/8/08 to 12/31/08 which is a 7500.00 first time home buyer tax credit. It is a 15 year loan interest free from the government. You start paying 500.00 from your tax return in 2010 and continue to pay on the loan until it is paid off or you sell the home. If the home is sold at a loss then the loan will not have to be repaid. The second law covers the time frame from 1/1/09 to 11/9/09. This is the 8000.00 Home buyers tax credit that is not repaid unless the home is sold in the first 3 years. It has some phase outs. 75,000 for singles and 150,000 for joint filing. The third tax law covers the time from 11/9/09 to 5/1/10. If you have a contract standing at 4/30/10 you can run the tax credit all the way until June if you move in by then.
The third tax law that covers the time frame from 11/9/09 to 5/1/10 had a change to the phase outs. It allows Memphis residents to make more money than before and still qualify. Also if you are not a first time Memphis home buyer and have lived in your house for the past 5 consecutive years out of 8 you can qualify for 6500.00. You don't have to sell your old house, but the new house has to be a primary residence. In order to prove you have been in your Memphis residence for the past 5 years you have to file form 5405 which requires a signed settlement statement on the new house or a certificate of occupancy on a house being built. They also have to file a form with tax records. If you are claiming this new house credit you can not e-file your taxes. If going through a divorce it is a good idea to retain a Memphis certified public accountant to make sure proper procedures are followed in order to obtain the home buyers tax credit. The Home Buyers credit requires someone to actually purchase a home. The 8000.00 and 6500.00 tax credit is a max credit. It is 10 percent up to this maximum amount. The purpose of this credit is to help stimulate the purchase of new Memphis homes.
