NORTH CHARLESTON, SC, November 23, 2008
/24-7PressRelease/ -- As the year draws to a close, it is a good time to be thinking about tax planning. According to Peter Hukki, Enrolled Agent with JK Harris and Company, the nation's largest tax representation firm, there are new credits, as well as extensions of previous credits taxpayers need to consider.
"This year, there are several changes to the tax laws taxpayers should be aware of in preparing for the upcoming filing season," said Hukki, an Enrolled Agent of 34 years. "There are new credits to be aware of as well as extensions of previous credits you may qualify for."
One credit likely to benefit a large pool of taxpayers is the First Time Homebuyer's Credit for qualified buyers who purchased or will purchase a home between April 8, 2008 and July 1, 2009. The credit will either reduce how much you pay or increase your refund. The credit will give you 10% of the purchase price of your new home, up to a refundable credit of $7,500. According to Hukki, this credit is basically a zero interest loan, as it must be repaid over 15 years starting two years after the year in which you claim the credit. If you claimed the maximum credit of $7,500, your repayment would be an additional tax of $500 each year when you file your return.
There is still a tax credit available on certain hybrid vehicles. If you are planning to buy a qualifying hybrid vehicle, you should do it by December 31, 2008 to receive a tax credit. This credit is only allowed on a certain number of hybrid vehicles produced by each manufacturer. More information is available on the credit at http://www.irs.gov/newsroom/article/0,,id=157632,00.html.
This past October, President Bush signed into law the Emergency Economic Stabilization Act of 2008, which has more than 100 tax provisions worth over $150 billion in tax benefits. Included in the Act are:
- Another AMT patch to protect middle class taxpayers from paying the Alternative Minimum Tax or AMT, a tax originally intended for those who were not paying any income tax due to large write-offs or exempt interest income.
- Popular tax breaks for education, such as the $250 deduction for teachers who buy out-of-pocket classroom supplies, as well as the Tuition and Fees deduction for eligible taxpayers with higher education expenses.
- The option to deduct state and local sales taxes rather than just state income tax. This benefits taxpayers living in states where there is no state income tax (Florida, Texas, Alaska, Nevada, South Dakota, Washington and Wyoming).
- The option for IRA owners who have reached 70 1/2 and must begin withdrawing money from their retirement accounts allowing them to contribute up to $100,000 tax -free to charity.
"It is very important taxpayers are aware of the changes Congress makes year to year to the tax code," said Hukki. "For many taxpayers, it is best to seek professional assistance to insure you are not missing out on any deductions or credits you might be entitled to."
Taxpayers can find more information on a larger range of tax changes for individuals at http://www.irs.gov/formspubs/content/0,,id=178012,00.html.
About JK Harris:
JK Harris & Company, LLC, (www.jkharris.com) based in North Charleston, S.C., is the nation's largest tax representation firm and has served over 225,000 customers since its founding in 1997 by John K. Harris. JK Harris consultants are available to meet with consumers in over 425 locations nationwide by appointment only. The company also provides services for student loan debt, fee-based financial planning, tax return preparation, and audit representation.
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