You’ve got your 1040A, your folder marked “Important Tax Documents,” and your handy calculator -- and now... you've got some questions.
Don't worry - we've got you covered!
Q: I'm a newlywed; what’s the best way to file?
A: Most couples file their return jointly, and that’s usually the best bet unless one of you:
- owes child support payments
- is self-employed
- owes the IRS money
- has a lot of medical expenses
Q: I bought a home in 2008; how will this change my tax return?
A: Good news: You get to deduct mortgage interest and real estate taxes. One bummer, though, is that you’ll have to file the long form 1040 instead of a 1040A.
There’s also a "First Time Homebuyers Tax Credit" available if you bought a home between April 9, 2008, and July 1, 2009. The credit is 10 percent of the purchase price and caps out at $7,500. The catch: You have to pay it back -- it’s more like an interest-free loan and must be repaid over a 15-year period.
Q: What are the new tax changes for 2009?
A: Going green will pay off! You can get tax credits for energy-efficient home improvements, such as windows, doors, roofs, insulation, HVAC, and nonsolar water heaters. This has just been put into effect; improvements made in the coming year will qualify on your 2009 return. Any improvements made during 2008 aren't eligible.
Check out this Nestie couple’s eco-friendly home chock-full of tax credits!
In light of the gas price increase we saw in 2008, the standard mileage rates have changed as well. In other words, the percentage of expenses you'll be able to deduct has increased slightly. This doesn’t apply to your day-to-day commute; it's only for those who travel frequently for business or use their car often for qualifying charity work or medical purposes. The new rates for the second half of 2008 are as follows: Business is 58.5 cents per mile; charity is 14 cents per mile; and medical and moving is 27 cents per mile.
Q: Do I need to claim my tax rebate on my taxes?
A: Nope -- the rebate isn’t taxable and won’t have any effect on your 2008 taxes. Bonus: If you didn’t receive the stimulus rebate during 2008 (or only received a partial rebate), you may qualify for a Recovery Rebate Credit on your 2008 return.
Get answers to more of your money questions from the experts at The Nest.
Nestpert Lori Preleski, a certified personal accountant (CPA) at Fiondella, Milone & LaSaracina LLP
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