7 Tax Tips for Energy Efficient Homes
August 13, 2010 | 
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Taking some energy saving step in your home now may lead to bigger tax savings next year. The Nonbusiness Energy Property Credit, a tax credit for making energy efficient improvements to homes was increased as part of the American Recovery and Reinvestment Act of 2009.
Here are seven things the IRS wants you to know about the Nonbusiness Energy Property Credit:
- The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 claimed for 2009 and 2010 combined.
- The credit applies to improvements such as adding insulation, energy-efficient exterior windows and energy-efficient heating and air conditioning systems.
- To qualify as “energy efficient” for purposes of this tax credit, products generally must meet higher standards than the standards for the credit that was available in 2007.
- Manufacturers must certify that their products meet new standards and they must provide a written statement to the taxpayer such as with the packaging of the product or in a printable format on the manufacturers’ Website.
- Qualifying improvements must be placed into service after December 31, 2008, and before January 1, 2011.
- The improvements must be made to the taxpayer’s principal residence located in the United States.
- To claim the credit, attach Form 5695, Residential Energy Credits to either the 2009 or 2010 tax return. Taxpayers must claim the credit on the tax return for the year that the improvements are made.
Homeowners who have been considering some energy efficient home improvements may find these tax credits will get them bigger tax savings next year.
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Top 10 Things Every Taxpayer Should Know About Identity Theft
August 3, 2010 | Subscribe to our RSS Feed
The IRS has issued a 10 item checklist of items a taxpayer should know about identity theft. A thief can steal a taxpayer’s personal information and then use that information to file a tax return and get a refund. Read these carefully and be wary of any scams.
- The IRS does not initiate contact with a taxpayer by e-mail.
- If you receive a scam e-mail claiming to be from the IRS, forward it to the IRS at phishing@irs.gov.
- Identity thieves get your personal information by many different means, including:
- Stealing your wallet or purse
- Posing as someone who needs information about you through a phone call or e-mail
- Looking through your trash for personal information
- Accessing information you provide to an unsecured Internet site.
- If you discover a website that claims to be the IRS but does not begin with ‘www.irs.gov’, forward that link to the IRS at phishing@irs.gov.
- To learn how to identify a secure website, visit the Federal Trade Commission at www.onguardonline.gov/tools/recognize-secure-site-using-ssl.aspx
- If your Social Security number is stolen, another individual may use it to get a job. That person’s employer may report income earned by them to the IRS using your Social Security number, thus making it appear that you did not report all of your income on your tax return.
- Your identity may have been stolen if a letter from the IRS indicates more than one tax return was filed for you or the letter states you received wages from an employer you don’t know. If you receive such a letter from the IRS, leading you to believe your identity has been stolen, respond immediately to the name, address or phone number on the IRS notice.
- If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost wallet, questionable credit card activity, or credit report, you need to provide the IRS with proof of your identity. You should submit a copy of your valid government-issued identification – such as a Social Security card, driver’s license, or passport – along with a copy of a police report and/or a completed Form 14039, Identity Theft Affidavit. As an option, you can also contact the IRS Identity Protection Specialized Unit, toll-free at 800-908-4490. You should also follow FTC guidance for reporting identity theft at www.ftc.gov/idtheft.
- Show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. Do not routinely carry your card or other documents that display your Social Security number.
- For more information about identity theft – including information about how to report identity theft, phishing and related fraudulent activity – visit the IRS Identity Theft and Your Tax Records Page, which you can find by searching “Identity Theft” on the IRS.gov home page.
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Summer Vacation-5 Facts about Childcare Tax Credits
July 12, 2010 | Subscribe to our RSS Feed
Your summer day care expenses may qualify for an income tax credit.
Many parents who work or are looking for work must arrange for care of their children (under the age of 13) during summer vacation. These expenses could qualify you for a credit on next year’s tax return.
The Child and Dependent Care Credit is available during the summer (and throughout the rest of the year). Here are 5 facts you need to know:
- The cost of day camp may count as an expense towards the child and dependent care credit.
- Expenses for overnight camps do not qualify.
- If your childcare provider is a sitter at your home or a daycare facility outside the home, you’ll get some tax benefit if you qualify for the credit.
- The actual credit can be up to 35 percent of your qualifying expenses, depending upon your income.
- You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.
Submitted by Sam Cohen
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2010 Estate Tax and Charitable Giving
June 30, 2010 | Subscribe to our RSS Feed
So far, there is no estate tax in place for 2010. That means if you bequeath money to charity in your will, that bequest won’t save any estate tax as it had in the past.
So, instead of a tax-useless charitable bequest, make a specific bequest to your heirs with a non-biding request that they make the requested charitable contribution. The heir will obtain an income tax charitable contribution deduction which is quite a tax improvement.
Submitted by Sam Cohen
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Maryland Sales Tax Holiday!
June 11, 2010 | Subscribe to our RSS Feed
Maryland will sponsor a tax-free period for qualifying apparel and footwear on August 8-14, 2010.
From August 8th through 14th, qualifying clothing and footwear priced $100 or less will be exempt from Maryland’s six percent sales tax.
“Clothing or footwear” means an article of apparel designed to be worn on or about the human body.
What is exempt?
The sales and use tax is not due on the sale of a qualifying article of clothing or footwear if:
- The sales price of the article is $100 or less; and
- The sale takes place during a period beginning at 12:01 a.m. on Sunday, August 8, 2010 and ending at 12 midnight on Saturday, August 14, 2010.
The exemption applies to each qualifying item selling for $100 or less, regardless of how many items are sold at the same time. For example, if a customer purchases two shirts for $80 each, both items qualify for the exemption, even though the customer’s total purchase price ($160) exceeds $100.
What will not qualify (and be taxed)?
The exemption does not apply to:
- Accessory items, even if they are priced at $100 or less. “Accessory items” include but are not limited to jewelry, watches, watchbands, handbags, handkerchiefs, umbrellas, scarves, ties, headbands, and belt buckles;
- The first $100 of a more expensive single article or set (as in a suit) of clothing or footwear. For example, if a customer buys a pair of pants costing $110, sales tax is due on the entire $110;
- Any special clothing or footwear primarily designed for protective use or not intended for everyday use.
A list of exempt and taxable items is available on the Comptroller’s Web site at www.marylandtaxes.com, or by calling the Taxpayer Service Section at 410-260-7980 in Central Maryland or toll-free 1-800-MD TAXES from elsewhere.
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