It's always tough to think about income taxes, but lately it's even more annoying. Those are your tax dollars being given away to bail out the banks, the auto companies and even some housing speculators.
I'm always amused when I remember that Election Day and Income Tax Day are spaced just about as far apart on the calendar as possible. This is no coincidence.
But enough complaining. If you're among the 40 percent of Americans who haven't filed their 2008 taxes yet, it's surely time to get started. And there's a lot that's new this year.
FIRST-TIME HOME BUYER CREDIT. If you have not owned a home in the last three years, and you purchased a home after April 8, 2008, and before Jan. 1, 2009, you get a tax credit for 10 percent of the purchase price, up to $7,500. That credit must be repaid over a 15-year period.
(There's a more generous provision for first-time home buyers who purchase a home in 2009 before Dec. 1. When you file your 2009 return next year, you may be eligible for an $8,000 tax credit, which does not have to be repaid.)
In both years, the credit phases out for those with income over $75,000 on a single return, and $150,000 on a joint return.
DEBT RELIEF. The Mortgage Forgiveness Debt Relief Act has been extended until 2013. That means if your lender forgives a portion of your loan when you sell at a loss, or if your home is foreclosed and the lender forgives the remaining debt, you do not owe income tax on the amount forgiven, as was previously the case.
RECOVERY REBATE CREDIT. Remember the "stimulus" check you received last spring. It was really an advance payment for this rebate credit, which is claimed on your 2008 return. The amount was based on your 2007 tax return, filed last April. But if you lost your job last year, or took a pay cut, you may now be eligible for a portion of that rebate, which you can claim when you file this return.
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