Taxes in Tough Economic Times

We’re enduring difficult economic times right now. Learn how to use the current tax code to help ease the pressure, take the credits you’re eligible for, and reduce the amount you owe. The government has several programs in place designed to help families undergoing financial hardship, and major life events can have an impact on your taxes. It’s important to know how each of these areas could affect you.

Home Related Tax Relief

Federal Tax Lien Relief – Home Refinance, Home sale

The Internal Revenue Service (IRS) has implemented an expedited process that will make it easier for financially distressed homeowners to avoid a federal tax lien which would block the refinancing of mortgages or the sale of a home.

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

Cancelled debt from commercial lenders is often included as taxable income on your federal income taxes.

The Mortgage Debt Relief Act of 2007, however, allows some taxpayers to exclude debt forgiven on their primary place of residence. Debt that qualifies for the relief includes debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately).

First Time Home Buyer’s Credit

If you were a first-time homebuyer in 2008, you should know about and begin to plan for a new tax credit that was recently put into place. The tax credit is applicable to taxpayers who purchased homes after April 8, 2008, and before July 1, 2009. The tax credit functions like an interest free loan with a 15 year term and can be worth up to $7,500 to new home buyers.
Job Related Tax Relief

Job Loss and Taxes

If you have been the victim of outsourcing or downsizing during these turbulent economic times, you could be eligible for some tax relief.

Job Searching

A job search can generate a substantial amount of expense when you start adding up printing costs, travel costs, and expenses incurred from networking. According to IRS regulations, you can deduct certain expenses incurred while looking for a new job, even if presently employed. You can deduct these expenses even without being offered a new job.
Other Life Changes and Taxes

Divorce, Separation, and Tax

A life altering event such as separation or divorce has many tax implications.

Marriage Tax

Did you get married in 2008 or are you planning to do so in 2009? Getting married is a big step in your life and will also impact your tax return. Take a look at some important information and details when planning for or preparing your tax return now that you are a married person.

Child Tax

Did you have a child during last tax year? Congratulations on the new addition to your family! There are many important tax ramifications and credits now available to you as a parent.
Other Tax Savings and Tax Planning Tips:

Tax Reduction

Do you expect a tax refund next tax season? If so, why wait until then if you could get this refund money earlier? Almost 100 million or 75% of all Americans got a tax refund check and the average refund check was about $2,400.That means that every month these tax payers pay an average of $200 too much in taxes. Are you one of them? You might take out too much tax from your paycheck. Remember the time value of money: money now is worth more than the same amount of money in the future.

Tax Free Income

Are you sure that you have considered all your tax free income options? Find out about some alternative tax free income options by visiting the Tax Savings page found in the resource box of this article.