BiggerPockets

Need to Know Tax Credits and Deductions

Thursday, January 21

With the new and expanded credits and tax deductions, there come more forms to file and more you need to know.  When it comes time to sit down and file your 2009 tax returns, you will find many new changes.  Some are a result of adjustments in inflation and others are from changes by Congress due to the national recession.

Depending on your individual situation, there may be good news or bad news in these changes for you.  Some things will, however, affect all taxpayers.  For example: the personal exemption has increased to $3,650 for each taxpayer and dependents.  That's up $150 from the 2008 tax season.  Tax brackets have also been adjusted an additional 5%, which means that you may not be moved up to a higher tax bracket if you earned more money than you did in 2008.

Changes to affect higher income levels include the alternative minimum tax being increased to $70,950 for joint returns and $46,700 for individuals.  For those with incomes higher than these amounts may be subject to the AMT tax. Changes like these happen every year in order to keep up with inflation.  But there are a slew of revisions for 2009 that will make filing your tax return slightly more complicated than usual. 

This year, you can also take more of a standard deduction if you paid local real estate or state taxes, bought a new car and paid sales or excise taxes and also met the income limits or if you were a victim of a disaster that was federally declared. 

Have you gotten married, had a baby, bought or sold stock, inherited money or property or other goods this year?  If so, it would be a good idea to sit down with a tax professional and review these life changes and see how they will affect your tax situation.  They're all deductible, but without the help of a professional, many common mistakes can be made only to delay your refund.

And, don't forget the credits you deserve if you were a first-time buyer.

Comments

1. 

   Joshua Dorkin Reply
   about 2 years ago

   Thanks for the reminders, Cheryl! Time to start getting organized for Tax Season.

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