Tax deal lets homeowners continue to deduct PMI, but some will lose the right to deduct property taxes.
It's no secret that homeowners get special tax treatment under the U.S. tax code.
There are the biggies of being able to deduct mortgage interest and property taxes. In case you missed them, those tax breaks are the latest (numbers 33 and 34) in the running Weekly Tax Tips for 2010 feature at Don’t Mess With Taxes.
In recent years, Congress even enhanced homeownership tax benefits a bit.
Provisions on Coverdell accounts, capital gains, IRA gifts to charity and other extensions benefit those who are not rich.
In December, President Obama and congressional Republicans reached a deal to preserve tax breaks created in the Bush adminstration. But the agreement isn’t all about tax cuts for the rich and unemployment bennies for the unfortunate. There are some sweet provisions in there for the vast middle, too. Dig deeper than the headline-grabbing rates (.PDF download), and you’ll find provisions that can help savers and investors, as long as they know how to make the most of them.
You’ve probably seen the big-picture provisions already (find them all in this Reuters factbox).
Current plan would exempt 40,000 estates from tax next year. Democrats say that gives too much to the wealthy.
This post is by Stephen Ohlemacher of the Associated Press.
More than 40,000 estates worth $1 million to $10 million would be expected to escape inheritance taxes next year under the deal struck by Republicans and President Barack Obama.
The package would leave only about 3,500 of the largest estates subject to federal taxes next year, a boon for the wealthy that many House Democrats say they can't accept.
The estate tax has emerged as one of the biggest obstacles to bringing Democrats aboard the tax cuts-employment benefits package negotiated by Obama and GOP leaders in Congress. House Speaker Nancy Pelosi called the lower estate tax "a bridge too far," while others in her caucus said it was a giveaway to the rich that would do little to create jobs.
You may want to buy office equipment, set up a retirement plan or pay next year's health insurance premiums before Dec. 31.
This post is by Mary Beth Franklin, senior editor of Kiplinger's Personal Finance.
Whether you launched a new business this year or you’re an experienced entrepreneur, being your own boss comes with a whole new set of tax issues -- and plenty of opportunities to trim your tax bill. In most cases, you have to spend money before the end of the year to claim a deduction on your 2010 tax return. And the tax breaks apply whether you are a full-time business owner or operate a sideline enterprise.
Upgrade your office. You may deduct the cost of equipment you buy for your business before year-end, such as a computer, software, shredder, filing cabinets and furniture. And you have two ways to claim a deduction: all at once (known as first-year expensing), or gradually over the life of the property, as fixed by law, by claiming depreciation deductions.
Small businesses, including sole proprietorships, are permitted to expense up to $500,000 of new business equipment, computers and furniture purchased in 2010, twice the 2009 limit. So if you purchased a new computer for $2,500 in 2010, you could deduct the full $2,500 on your 2010 tax return.
After weeks of Washington back-and-forth, President Obama and GOP leaders have reached an uneasy agreement. But will what helps families now hurt them later?
This post comes from MSN Money's Liz Pulliam Weston.
I'm feeling some tax-cut whiplash.
A couple of weeks ago, my husband and I were contemplating a tax bill that would rise at least $6,500 next year if the Bush-era tax cuts expired or weren't extended for households, including ours, that make over $250,000.
Today, we stand to benefit from a deal that not only preserves our current tax breaks, but also gives us an additional $4,200 tax cut -- a giveback much bigger than that enjoyed by the vast majority of workers.
What the hell?
The plan extends tax cuts, including the estate tax and the child tax credit. It also cuts payroll taxes. The unemployed and businesses would benefit, too.
President Barack Obama and Congress reached a tentative deal Monday on a plan to keep the tax cuts enacted by former president George W. Bush in effect for another two years. The proposal also would preserve extended unemployment benefits and make some additional tax changes.
The details are still being negotiated, but Martin Vaughan of The Wall Street Journal provided this explanation of what's under discussion:
- The core of the proposal is a two-year, across-the-board extension of tax cuts enacted under former President George W. Bush. Mr. Obama said in his remarks Monday evening that he didn't favor extending tax cuts for top earners, but compromised to keep tax breaks for the middle class.
Two energy tax credits can help you save energy and tax dollars.
This article is by Laura Saunders at partner The Wall Street Journal.
Still smarting from your 2009 taxes? Start whittling the bill for next April.
A good place to begin: two federal tax credits for homeowners who want to save energy, one of which expires at the end of this year. The credits have appeal both for true green diehards and those who are staying put due to housing market doldrums.
If you're going to mail your return at the 11th hour, make sure it's going to get to the IRS.
This article comes from partner Bankrate.com.
More than two-thirds of U.S. taxpayers electronically file their returns. But that still leaves more than 46 million individuals who fill out their tax forms by hand and rely upon the U.S. Postal Service to get the documents to the IRS.
A large portion of those old-fashioned filers also are card-carrying members of the last-minute tax return club. That's not necessarily bad, especially if you owe the IRS. There's no need to send in your money until you absolutely have to. But you don't want to push the limit so far that you end up in a hurry and make an even more costly delivery mistake.
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