Andy Powers-A Professional who cares..About YOU!
Tax Saving Alerts for 2009
First Time Home Buyers
Don’t forget that if you have never purchased a home 2009 may be the year to do so, but the closing has to be before December 1, 2009 if you want to get the refundable tax credit. Unlike first time home buyers in 2008 who got an interest free loan from the IRS of up to $7,500 that had to be paid back, those who purchase their first home in 2009 get a tax free “yours to keep” refundable tax credit of the lesser of $8,000 or 10% of the cost of the new home. Not a bad deal if your job is relatively secure as housing prices are still down (hopefully at their lowest but who knows) plus if your home costs $80,000 or more you get a tax stimulus from the US Treasury of $8,000 which you can use as you wish.
NEW CAR PURCHASES
Don’t forget sales taxes on most new car purchases before January 1, 2010 (costing less than $49,500 each) are deductible. Keep in mind that this deduction counts for all new car purchases, so if you buy two cars costing $25,000 each you get to deduct the entire sales tax on both cars.
MEDICAL Expenses
Don’t forget medical expenses include all expenses relating to treatment, including transportation to and from doctors, rehabs, dentists, hospitals etc. It also includes meals and lodging if for medical purposes. SO if a family member is confined to a nursing home for MEDICAL reasons (such as mental incapacity) then the long term care expenses is a medical expense deduction (as are the insurance premiums). Also, if you need to hire someone to care for a family member at home (nursing care) for medical purposes, it is deductible.
Small Businesses
Small business may be the backbone that supports our economy but that will not stop the IRS from increasing audit compliance on small businesses in an effort to close the tax gap on unreported income. There is no such thing as an accountant who is “too honest”. If your tax advisor warns you not to do something (like hiring illegal immigrants or paying people off the books) and to report all of your income, heed the advice.
Form 1099 Reporting
ALL businesses are required to report, no later than February 15, payments required to be reported on Form 1099-MISC. This includes payments to attorneys and payments of RENT. So even if you don’t have any sub-contractors working for you have to issue a Form 1099 to your landlord. Hairdressers who rent a booth from a hair salon must issue a 1099 to the salon!
Attention hair salons-Be sure it is determined in advance as to your relationship with the people who work in your salon. Are they your employees or do they rent space from you. Forget about saying that you pay them as independent contractors. If you pay them then they are your employees. If they rent from you they should collect their service fees from their customers and pay you as their landlord based on the pre-arranged agreement.