Tax Tips Debt Relief If you owe money on your mortgage or on other debts, amounts reduced or forgiven by the lender are often considered taxable income. The Mortgage Debt Relief Act of 2007 excludes these amounts from income for certain mortgage debt. First-time Homebuyer Credit This credit has been extended and expanded as of November 6, 2009. Taxpayers who qualify can claim a tax credit of up to $8,000. Qualifications: •Must either be a first-time homebuyer OR •Long-time homeowner buying a replacement principal residence •Taxpayer must buy or enter into a binding contract to buy a principal home on or before April 30, 2010 and close by June 30, 2010. Unlike the 7,500 credit available for 2008, this credit does NOT need to be repaid! New Jersey offers a First-time Homebuyers Tax Credit Loan Program (TCLP) to provide a loan to pay down payments and/or closing costs. Business Expenses - Depreciation For 2008 and 2009, Section 179 depreciation has doubled, to $250,000 per year. There are also new provisions for bonus depreciation. Business Expenses – Auto & Truck Expenses For 2009, the IRS allows a deduction of $.55 per mile for business mileage. Zero Percent Capital Gain Rates For 2008 through 2010, for qualifying individuals, there is a federal income tax rate of 0% on long-term capital gains. To qualify, the individual must be in the 10% or 15% federal tax bracket. College Credits There have been significant changes to The Hope Credit for college expenses. For 2009 and 2010, if you qualify, it has been increased to $2,400 per student (was $1,800 per student for 2008). The rules and method of calculation have also changed. You must fall under specified amounts to qualify. _____________________________________ FREQUENTLY ASKED QUESTIONS What should I bring to my tax return interview? You should bring the following if they apply to you: wage statements (W-2), pension or retirement income (1099-R), social security or unemployment income, dependents' social security numbers and birthdates, education expenses, information on sales of stocks/bonds, self-employment business income & expenses, gambling wins/losses, state refund amount, statements from purchase/sale of real estate, medical/dental expenses, real estate taxes, estimated taxes or foreign taxes paid, cash and non-cash charitable contributions, mortgage/home equity loan interest paid (1098), child care expenses, last year's tax return if this is your first meeting with us. How long should I keep tax returns and supporting documents? Three years from the date the return was filed or the date the return was required to be filed, whichever is later. I have received a notice from the IRS regarding my taxes - what should I do? Read the notice carefully to see why it was sent and what is being requested. If you need help please provide a copy of the notice to us - be aware that there is a respond by date in the upper left hand corner of the first page of the notice. How do I find out about the status of my refund? Use the links from the first page of our website. You will need your social security number, filing status and the exact amount of the refund you are expecting.