It used to be that people would come to my office each winter to have their taxes prepared, and we would not only discuss ways to save some taxes for the prior calendar year, but would also explore ways to minimize their tax burden going forward. Now, when my clients meet with me, it’s more like meeting with Tom Cruise’s character Jerry Maguire. “Show me the MONEY! SHOW ME THE MONEY!!!” is what they are saying.
During the past year, Washington has gone crazy giving away money. Here are some of the lucrative tax breaks available to taxpayers in connection with filing their 2009 tax returns:
$8,000 First Time Homebuyer Credit:
Did you buy a home recently? If so, the government wants to give you up to $8k if you haven’t owned a home for at least three years or $6.5k if you owned a home for five consecutive years during the eight year period leading up to the purchase date. Read more about this tax break on our December 2009 newsletter.
$1,500 Energy-Efficient Tax Credit:
Did you make any energy efficient improvements to your primary home? If so, the government wants to give you up to $1,500 if you spent at least $5k on energy efficient exterior doors, windows, insulation, central A/C, heat pump, furnace, water heater, or biomass stove. Read more about this tax break on our June 2009 newsletter, or at www.energystar.gov.
$800 Social Security Tax Credit:
Do you work and pay social security taxes? Well, the government is now refunding single individuals the first $400 of social security taxes paid during the year. Married couples get a refund of up to $800 – even if only one spouse works. Read more about this tax break in our March 2009 newsletter.
Sales Tax Deduction On New Car Purchase:
Are you driving around in a new car that you purchased after 2/16/09? If so, don’t forget to write off the sales tax you paid on that vehicle. Read more about this tax break in ourMarch 2009 newsletter.
Increased and Improved Undergraduate Tax Credit:
Do you have a child in college? Well, if so, the government wants to give you up to $2,500 per child who is still an undergraduate. And for the first time since these education credits were introduced back in 1998, up to $1,000 of this credit is refundable per college student – which means you get some money back from the government for each child’s undergraduate tuition even if you pay no income taxes. Read what the IRS says about the newAmerican Opportunity Tax Credit.
$20 Per Month For Riding Your Bike to Work:
Do you ride your bike to work most days? If so, the government allows your employer to give you $20 per month, completely tax-free to you. Read about what the IRS says about theQualified Bicycle Commuting Reimbursement.
Show Me The Money:
As you can see, I wasn’t kidding. Good tax planning is taking a back seat to these lucrative government giveaways. Every day this winter, my clients are telling me, “Show Me The MONEY! SHOW ME THE MONEY!!!”
** Listen to Andrew’s February 2010 Radio Interview – Show Me The Money (on Greater Boston Media) (9 minutes)