Tarpley & Underwood
Financial Advisors, LLC
Don't Forget These 2009 Tax Breaks!
Plan to Exploit Them Before They Expire
COBRA continuation. Did you get laid off this year? Were you insured under an employer-sponsored health plan? Well, you may qualify for up to nine months of (COBRA) coverage. As for the company where you worked, it can claim a credit for the COBRA subsidy it extends to you.4
$2,400 in unemployment income tax-free. That’s right: this year, the first $2,400 of federal unemployment compensation benefits you receive are excluded from gross income.4
An extra deduction for state and local property taxes. Do you usually claim the standard federal deduction? If that’s your plan, this year you can take an additional deduction for state and local property taxes. The ceiling is $500, $1,000 if you are filing jointly.5
The capital gains tax break. If you are in the 10% or 15% tax bracket, note that the current tax rate for long-term capital gains is 0% - and it is slated to stay at 0% through 2010.6
The homebuilder tax credit. Do you build homes? If so, you may claim a credit of up to $2,000 for each qualified energy-efficient home constructed and acquired from you for use as a residence. This credit is set to expire December 31, 2009; President Bush’s signature extended it into this year.7
And of course, the exemption from required IRA distributions. The federal tax mandate requiring IRA owners age 70½ to take Required Minimum Distributions (RMDs) was suspended for 2009, but it will be reinstated for 2010. Worth noting: in 2010, anyone will be able to convert a traditional IRA into a Roth IRA.4,8
This is just a sampling. There are other tax breaks out there during this unusual year for the federal tax code, and it is worth asking your accountant or advisor to do some research and/or collaborate to find you as many as possible.
The information expressed in this article is provided as a service of Tarpley & Underwood Financial Advisors, LLC for its clients and other interested parties. It is not intended to be investment, legal, tax or other professional advice. All information is believed to be from reliable sources; however, we make no
representation as to its completeness or accuracy. If expert assistance is needed with this information, we encourage you to seek competent professional advice.
Citations.
1 federalhousingtaxcredit.com/2009/glance.php [9/18/09]
2 irs.gov/newsroom/article/0,,id=203313,00.html [2/4/09]
3 smsmallbiz.com/taxes/4_Stimulus_Plan_Tax_Perks_for_Businesses.html [3/4/09]
4 articles.moneycentral.msn.com/Taxes/CutYourTaxes/12-tax-breaks-get-em-while-you-can.aspx?page=1 [7/20/09]
5 hrblock.com/press/Article.jsp?articleid=22617 [1/28/09]
6 forbes.com/2008/02/13/capital-gains-taxbreak-pf-education-in_dp_0212investopedia_inl.html [2/13/08]
7 acca.org/blog.php?id=303 [1/6/09]
8 usatoday.com/money/perfi/columnist/block/2009-08-31-roth-ira_N.htm [8/31/09]
