New Year, New Tax Rules

It is tax season again.  Regardless of how tough the times are, paying your taxes cannot be ignored.  The IRS doesn’t care about your credit scores or your debt problems; all they care about is that you pay your taxes.

The IRS tries to help tax payers lower our taxes by offering different tax deductions; but to take advantage of these deductions, you must be aware that they exist.   Are you aware of all the new tax rules and tax deductions that you can take advantage of?  Help your accountant help you by learning about some of the new deductions available this year.

To help lower your taxes take advantage of these deductions:

1) Tax Deductions

Should you take the standard deduction or itemize this year?  Ask your accountant to figure your taxes both ways to determine which is better for you financially.

2) Roth IRA Conversions

If you have not converted your traditional IRA’s to Roth IRA’s you may want to consider it this year.

3) Homeowner Tax Credits

First time home buyers can take a 10% credit, maxing out at $8000.

Tax deductions and home energy tax credit4) Home Energy Tax Credits

If you did any home improvements that qualified as energy-efficient you can claim a 30% credit – maxing out at $1500.   Make sure you give your accountant the proper receipts.

5) Capital Gains

Depending upon your tax bracket you may not have to pay taxes on your capital gains for 2010.   Ask your accountant if you qualify.

6) State  Sales Tax

In some cases you benefit financially if you deduct state sales tax vs state and local income taxes.

7) Job Search Expenses

If you are looking for a new job, you can deduct the expenses you accumulate, maxing out at 2% of your adjusted gross income.