Taxation & Estate Planning

Maximize your Income Tax Breaks

By Darrin Mish

nterested in getting maximum tax breaks from the IRS? Well, the IRS has released some helpful tips to enable you to get as many deductions as possible on your income tax before the end of the year. Some actions need to be taken and some are to be avoided before Dec 31st in order to take advantage of the tax breaks.

For instance, if you want an additional deduction you could buy a new car. A brand new car bought between Feb 16 and Dec 31 entitles you to make deductions from the sales tax or excise tax you paid for the vehicle. But there are limitations as purchase price and income levels. You may buy as many vehicles as you want but each vehicle qualifies you to a tax deduction on up to $49,500 of the purchase price of each vehicle. However, this phases out for taxpayers in a higher tax bracket.

Another type of purchase that entitles you to a tax deduction is that of a new home under the American Recovery and Reinvestment Act (ARRA). If you are a first time homebuyer who has not owned a principle home the last 3 years, you are entitled to a tax deduction of up to $8,000 when you buy one this year.

You could also take advantage of the ARRA's incentive to make your home more energy-efficient and get a tax break for 30% of the cost of such improvements up to a limit of $1,500. For example, you could install energy efficient external windows. There are 2 types of improvements you could make to your windows. The first is improving the UV value of the window and the second is improving the solar heat gain coefficient of the window (how well the window keeps the heat of the sun out).

Making donations to charitable organizations is a common way to obtain a tax deduction, even if your donation is made via a credit card. As long as your credit card statement shows the payment was made this year, you are entitled to a tax deduction for it. You could also donate non-money contributions such as household items to charity and if you are aged at least seventy and a half you could make direct transfers out of your IRA to a charity tax-free up to $100,000.

You also can get tax breaks through the Earned Income Tax credit. Even if you have never qualified for this tax deduction before, you may qualify this year because of the number of people who have gotten laid off.

To find out more details about these tax breaks and whether you qualify, contact the IRS themselves. Their website is www.irs.gov.

Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.

Maximize your Income Tax Breaks is a post from: IRS Tax Problem Solver Blog - IRS Help

Full post as published by IRS Problem Solver Blog on January 07, 2010 (boomark / email).