Kane & Company, Certified Public Accountants And Advisors

There is still time to make some moves regarding your retirement plan contributions to cut your 2009 tax bill.

There are currently two energy savings tax credits available for tax years 2009 and 2010. The American recovery and reinvestment act, enacted earlier last year, expanded two home energy tax credits the non-business energy property credit and the residential energy efficient property credit.

Yesterday, U.S. Senators introduced legislation to waive tax-deduction limits on donations designated for Haiti. This move is to encourage charitable contributions for relief efforts in the earthquake-stricken country. Under current law, taxpayers can take a charitable deduction of as much as 50% of their annual income and corporations can take deductions for charitable contributions of up to 10% of their taxable income for the tax year. This legislation would waive these limitations.

As a follow-up to last week's podcast on tax tips for 2010, this podcast highlights a few important tax changes that go into effect in 2010. These changes result from various laws that were enacted and other guidance issued over the past few years. The required minimum distributions (RMDs) return. Required minimum distributions are annual distributions from traditional individual retirement accounts and qualified plans that must begin by the year you reach age 70 1/2. These required distributions for calendar year 2009 were waived. However, you must begin these minimum distributions again in 2010.

2009 ends on a far more hopeful note for the economy than it began. And the advent of 2010 presents some unique tax planning opportunities for many individuals. However, here is fair warning. Keep your hands on your wallets. Prospects are strong that Washington will pay for proposed health care reform and attempt to shrink the budget deficit by raising your taxes over the next few years.

There is a variety of tax credits and deductions available to tax payers to assist with the expense of higher education. A tax credit reduces the amount of your income tax you have to pay.

Individuals and businesses making contributions to charities should keep in mind several tax law provisions that have taken effect in recent years. Listen for more important information regarding this matter.

Make year-end gifts. A person can give any other person up to $13,000 for 2009 without incurring any gift tax. The annual exclusion amount increases to $26,000 per donee if the donor's spouse consents to gift-splitting. Anyone who expects eventually to have estate tax liability and who can afford to make gifts to family members should do so.

After it lost court cases on whether a basis overstatement is an omission of gross income for purposes of the longer limitations period, the IRS recently modified treasury regulations to make clear that a basis overstatement can trigger the six-year statute of limitations period. In so doing, the IRS sought to strengthen its position, which has been rejected in the Tax Court and two circuit courts this year.

The "Worker, Homeownership, and Business Assistance Act of 2009," signed into law on Nov. 6, extends and generally liberalizes the first-time homebuyer tax credit, making it a much more flexible tax-saving tool. It also includes some crackdowns designed to prevent abuse of the credit.

On November 6th, the "Worker, Homeownership, and Business Assistance Act of 2009" was signed into law. This law includes an important new net operating loss provision which is the focus of this podcast. The new Act includes provisions that extend the 5-year carryback of net operating losses (also known as "NOLs") to apply to 2009 NOLs, and makes most businesses eligible for the 5-year carryback (not just the eligible small businesses which were previously privy).

There is an interesting new rollover opportunity that's coming up in a few months. After 2009, you will be able to roll over amounts in qualified employer sponsored retirement plan accounts, such as 401(k)s and profit sharing plans, and regular IRAs, into Roth IRAs, regardless of your adjusted gross income (AGI).

In hopes of spurring the housing industry, the American Recovery and Reinvestment act of 2009 included an enhanced tax credit for first-time home buyers. However, the deadline for this credit is quickly approaching. Potential homebuyers must complete their first-time home purchases before Dec. 1 to qualify for the special first-time homebuyer credit.

On October 16th the Internal Revenue Service announced that tax rate brackets and various tax benefits will remain unchanged or change only slightly in 2010 due to inflation.