Latest Tax Changes

As you prepare your taxes, you may discover several new tax law changes that may help maximize your refund. Jackson Hewitt Tax Service reports that more than 100 new tax law changes have been passed this year to help individual consumers. Here are some Tax changes that can help you save toward your debt settlement. For further details about your specific situation, contact a tax professional.
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Recovery Rebate Credit
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Taxpayers that did not qualify for the entire Economic Stimulus Payment in 2008 may be able to receive the remainder of the funds through this tax credit. Individuals that had a child in 2008 after filing a tax return may also be eligible. Taxpayers that do qualify for the Recovery Rebate Credit will not receive separate checks, but the amount will be included in their refunds.
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Mortgage Debt Relief Act
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According to the IRS, homeowners that foreclosed on their primary home can exclude the cancelled debt amount from their taxable income. The mortgage had to be the taxpayer’s primary residence and not exceed $2,000,000. The home loan also had to be used to buy, build, or improve the home.
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First-Time Homebuyers Credit
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Taxpayers who purchased a new home for the first time after April 8, 2008, may qualify for a refundable credit up to $7,500. This credit is part of the American Housing Rescue and Foreclosure Prevention Act. It acts like a refundable tax credit and works like an interest-free loan. The credit must be paid back in equal parts over a period of 15 years beginning in 2010. In addition to first-time home buyers, the IRS web site indicates that individuals who have not owned a main home in the past three years may also qualify for this credit.
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Unemployment Deductions
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If you lost your job in 2008, ask your tax professional about itemized tax deductions for job search expenses. According to Jackson Hewitt Tax Service, you may be eligible to deduct costs associated with travel, printing resumes, or job placement fees. If you were required to relocate for a new job, you may be able to deduct moving expenses.
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Assistance Available For Those Unable To Pay Taxes
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If you discover that you will not be able to pay your 2008 taxes, you may have options available. The IRS has compiled a list of questions and answers on their web site that deal with certain scenarios and financial situations. Due to the present state of the economy, some taxpayers may qualify for leniency if they owe back taxes. According to the IRS web site, financially distressed taxpayers may be eligible for suspended collection activity if they have a hardship case. For those unable to make a scheduled payment in an existing installment plan, the IRS may allow the individual to skip a payment.
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Disclaimer
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This article is intended to give a basic overview of tax changes that may be available to you. It is not intended to replace the advice of a qualified tax professional. We recommend that you consult an experienced tax expert that may be able to help you with your individual situation.
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Tax Resources
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