The Internal Revenue Service wants to remind taxpayers in preparing their tax returns to be aware of recent tax changes including new credits as well as recently reinstated deductions.
“Some tax breaks and a review of your tax situation may result in a bigger refund or less taxes to be paid,” New Jersey’s IRS Spokesperson Gregg Semanick said. “To ensure you do not miss out on any available tax credits, deductions and benefits, the IRS encourages taxpayers to consider e-filing their federal tax returns. Over 2.5 million New Jersey federal tax returns were e-filed with the IRS last year. This accounted for 60 percent of all New Jersey federal tax returns filed. E-filing coupled with direct deposit is a fast and convenient way to receive your tax refund in as little as 10 days. In New Jersey, approximately 75 percent of all filers receive a refund.”
The Internal Revenue Service offers these tax tips:
First-Time Homebuyers Tax Credit – First-time homebuyers can take advantage of a new tax credit available for a limited time. The credit applies to primary home purchases between April 9, 2008 and June 30, 2009. This tax credit must be paid back in equal payments over 15 years. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. First-time homebuyers are those who have not owned a home in the three years prior to a purchase.
Recovery Rebate Credit – If you did not qualify or did not receive the maximum amount for the 2008 Economic Stimulus Payment you may be entitled to a Recovery Rebate Credit when you file your 2008 tax return. Review the tax return filing instructions including the Recovery Rebate Credit worksheet.
Real Estate Tax Deduction –There is an additional standard deduction for those who don’t qualify to itemize their tax deductions, but pay real estate taxes. The additional deduction amount is equal to the amount of real estate taxes paid up to $500 for single filers or up to $1,000 for joint filers. This deduction is available for the 2008 and 2009 tax years. This property tax deduction is in addition to the standard deduction used by filers.
Tuition and Fees Deduction - You may be able to deduct qualified tuition and required enrollment fees up to $4,000 that you pay for yourself, your spouse, or a dependent. You do not have to itemize to take this deduction. However, a taxpayer cannot take both the tuition and fees deduction and education credits (Hope & Lifetime Learning Credits) for the same student in the same year. Income limits and other special rules apply to each of these provisions. To determine whether your expenses are qualified, refer to IRS Publication 970, Tax Benefits for Education. IRS Publication 970 also describes other education-related tax benefits.
Educators’ Out of Pocket Expense Deduction - The educator expense deduction allows teachers and other educators to deduct the cost of books, supplies, equipment and software used in the classroom. Eligible educators include those who work at least 900 hours during a school year as a teacher, instructor, counselor, principal or aide in a public or private elementary or secondary school. Worth up to $250, the educator expense deduction is available whether or not the educator itemizes deductions on Schedule A.
State Sales Tax or State Income Tax Deduction – If you itemize deductions, you have the option of claiming either state income or state sales taxes, whichever one is larger. You can’t claim both. You can use either your actual expenses or the state sales tax tables to figure your sales tax deduction. You could fill out the worksheet and use the optional general sales tax tables in the Schedule A instructions for Form 1040 or make it easier on yourself by using the Sales Tax Deduction Calculatoron the IRS.gov Web site.
Recordkeeping – Are your tax records organized? The IRS encourages taxpayers to take the time to gather and organize their records prior to preparing their tax returns to reduce stress at tax time.
IRS.gov Web site - Check out the latest tax changes on the IRS.gov Web site and remember to e-file your tax return which helps ensure you do not miss out on any tax deductions, credits and benefits. Check out the benefits of e-filing at the http://www.irs.gov/ Web site.
“Some tax breaks and a review of your tax situation may result in a bigger refund or less taxes to be paid,” New Jersey’s IRS Spokesperson Gregg Semanick said. “To ensure you do not miss out on any available tax credits, deductions and benefits, the IRS encourages taxpayers to consider e-filing their federal tax returns. Over 2.5 million New Jersey federal tax returns were e-filed with the IRS last year. This accounted for 60 percent of all New Jersey federal tax returns filed. E-filing coupled with direct deposit is a fast and convenient way to receive your tax refund in as little as 10 days. In New Jersey, approximately 75 percent of all filers receive a refund.”
The Internal Revenue Service offers these tax tips:
First-Time Homebuyers Tax Credit – First-time homebuyers can take advantage of a new tax credit available for a limited time. The credit applies to primary home purchases between April 9, 2008 and June 30, 2009. This tax credit must be paid back in equal payments over 15 years. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. First-time homebuyers are those who have not owned a home in the three years prior to a purchase.
Recovery Rebate Credit – If you did not qualify or did not receive the maximum amount for the 2008 Economic Stimulus Payment you may be entitled to a Recovery Rebate Credit when you file your 2008 tax return. Review the tax return filing instructions including the Recovery Rebate Credit worksheet.
Real Estate Tax Deduction –There is an additional standard deduction for those who don’t qualify to itemize their tax deductions, but pay real estate taxes. The additional deduction amount is equal to the amount of real estate taxes paid up to $500 for single filers or up to $1,000 for joint filers. This deduction is available for the 2008 and 2009 tax years. This property tax deduction is in addition to the standard deduction used by filers.
Tuition and Fees Deduction - You may be able to deduct qualified tuition and required enrollment fees up to $4,000 that you pay for yourself, your spouse, or a dependent. You do not have to itemize to take this deduction. However, a taxpayer cannot take both the tuition and fees deduction and education credits (Hope & Lifetime Learning Credits) for the same student in the same year. Income limits and other special rules apply to each of these provisions. To determine whether your expenses are qualified, refer to IRS Publication 970, Tax Benefits for Education. IRS Publication 970 also describes other education-related tax benefits.
Educators’ Out of Pocket Expense Deduction - The educator expense deduction allows teachers and other educators to deduct the cost of books, supplies, equipment and software used in the classroom. Eligible educators include those who work at least 900 hours during a school year as a teacher, instructor, counselor, principal or aide in a public or private elementary or secondary school. Worth up to $250, the educator expense deduction is available whether or not the educator itemizes deductions on Schedule A.
State Sales Tax or State Income Tax Deduction – If you itemize deductions, you have the option of claiming either state income or state sales taxes, whichever one is larger. You can’t claim both. You can use either your actual expenses or the state sales tax tables to figure your sales tax deduction. You could fill out the worksheet and use the optional general sales tax tables in the Schedule A instructions for Form 1040 or make it easier on yourself by using the Sales Tax Deduction Calculator
