Use 2010 numbers for this year’s tax planning

The law requires the IRS to make annual inflationary adjustments to a variety of tax numbers. Because 2009 inflation was minimal, most of these numbers will remain unchanged or change only slightly for 2010. Here are some of the key tax numbers you’ll use for your 2010 tax planning. Read the rest of this entry »

Big changes ahead make 2010 a critical year for tax planning

The dawn of the second decade of the 21st century will start off with sunsets, at least in the tax world. You may recall that many of the tax acts passed over the last nine years included “sunset” provisions, or built-in expiration dates. The result: 2010 might be the last year to take advantage of certain credits, deductions, and other federal tax breaks.

The biggest change involves tax rates. Current favorable capital gains and ordinary income tax rates are scheduled to expire at the end of 2010. On January 1, 2011, rates will revert to higher pre-2001 levels – unless Congress enacts new legislation. Either way, the potential for increased tax rates in 2011 and beyond calls for advance planning. Two areas in particular need your attention if you want to minimize your taxes. Read the rest of this entry »

It’s tax time again: Some reminders

* Deduction reminders

With the ever-changing tax law, it’s easy to lose track of what’s deductible from one year to the next. Don’t overlook these deductions available for your 2009 return:

* Sales tax paid on up to $49,500 of the purchase price for a new vehicle.

* Choice of deducting sales taxes paid in 2009 or state and local income taxes paid.

* Educator’s deduction of up to $250 for classroom supplies purchased.

* Deduction for college tuition and fees.

* Additional standard deduction of up to $500 ($1,000 for couples) for real estate taxes paid.

Various restrictions and income limits usually apply. Read the rest of this entry »