Welcome to Our Tax Tips Newsletter:

Continuing our effort to provide you with valuable, practical tax information, we will periodically update this page with useful income tax tips and income tax advice from the best sources -- information on issues that you commonly deal with. Be sure to check our newletter from time to time to stay on top on of the latest and most effective tax strategies.

TaxEdge will provide income tax tips that will help you save money when it’s time to file your tax returns. It’s a good idea to use a well planned strategy so that you aren’t surprised in April. Using TaxEdge Income Tax Preparation Software and keeping good records could mean the difference between paying a large chunk of money in April and receiving a big refund check. Use our income tax tips as part of your ongoing preparation.

The IRS, in commemoration of Earth Day 2009, released new guidance regarding energy-saving credits available to taxpayers who purchase certain products that reduce energy use or produce renewable energy.

"These new, expanded credits encourage homeowners to make improvements that will make their homes more energy efficient," said IRS Commissioner Doug Shulman. "People can improve their homes and save money over the long run."

Residential Energy Property Credit

The residential energy property credit was previously available to homeowners in 2007, but was repealed in 2008 before being reinstated in its current form. For 2009, the credit has been increased to an amount equal to 30 percent of the cost of qualifying home improvements, including installation of insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems. The maximum credit allowed is $1,500. The energy-efficiency criteria for qualifying property are now more stringent.

Homeowners seeking to claim these credits may currently rely on existing manufacturer certifications or Energy Star labels in determining which products qualify for the credit. Within the next several months, updated certification guidelines will be announced.

Residential Energy-Efficient Property Credit

The IRS also provided interim guidance relating to the tax credit for residential energy-efficient property placed in service for tax years beginning after December 31, 2008. This tax credit applies to expenditures for qualified solar electric property, qualified solar water-heating property, qualified fuel cell property, qualified small wind energy property, and qualified geothermal heat pump property for use in residential properties.

The law, as recently amended, provides a credit in an amount equal to 30 percent of a taxpayer's qualifying expenditures. It also clarifies that qualifying expenditures include labor costs for site preparation, assembly, original installation and piping or wiring to connect the property to the dwelling. More significant, the new law also eliminates the caps that were in prior law which limited the maximum allowable credits.

To review more of the specifics, see our full story on these energy credits.

Income Tax Tips from the 2010 Tax Guide

The "Kiddie Tax" on Investment Income
There are special rules relating to the tax treatment of the investment income of minor children. These "kiddie tax" rules result in higher taxes based on the highest marginal rate of the parents.   For clarification of these rules and the options for reporting the taxable investment income, please review Investment Income of Your Minor Child.

Claiming Casualty and Theft Losses
With so many weather-related disasters occurring almost routinely now, it is very possible that you have suffered a casualty loss from fire or flood or other natural cause. If so, or if you have been the victim of a theft or an accident that resulted in loss or destruction of your property, you may be able to deduct some of your loss.   For an overview of the issues related to claiming a deduction for casualty and theft losses, please read Casualty and Theft Losses.

Purchasing vs. Leasing Business Assets
You may plan to acquire new business assets during 2009. While you may want to purchase the assets and take advantage of special expensing and accelerated depreciation to maximize business deductions, you may prefer the simplicity of leasing with its more stable deductions over time.   For some help in determining which option is best for you, take a look at Purchasing vs. Leasing.

Business Income and Self-Employment Tax
If you are a new business owner, don't be surprised at the end of the year by the duty to pay your contributions to Social Security and Medicare. Once you have calculated your net business income for the year, your next task is to calculate your self-employment tax obligations.   For a quick refresher course on SECA taxes, please review Self-Employment Tax.

Tax News

IRS Issues "Dirty Dozen" List of Tax Scams
The Internal Revenue Service on April 13, 2009, issued its 2009 "dirty dozen" list of tax scams, including schemes to hide income offshore, report exaggerated values for in-kind charitable contributions, and file false claims for refunds. It also warned against falling for phishing schemes attempting to steal your personal information.    For more on these important issues, please read IRS Issues "Dirty Dozen" List of Tax Scams.

Phase-Out of Tax Credit for Ford Hybrids Begins
The IRS announced the phase-out of the tax credit for hybrid automobiles and light trucks built by Ford Motor Company, beginning with purchases made after March 31, 2009. If you had purchased a new 2010 Ford Fusion Hybrid before April 1, the IRS would have paid you $3,400 for being such an energy-efficient big spender. Today, Uncle Sam will still pay you to buy the same Ford Fusion, but now you'll only get half the payment.    To find out why, read Phase-Out of Tax Credit for Ford Hybrids Begins.

April 15th--A Perfect Day for a Presidential Tax Policy Message
What better day to tout presidential tax policies than on tax day--April 15th. President Obama did just that, declaring the policies that guide his thinking about taxes. "We start from the simple premise that we should reduce the tax burden on working people, while helping Americans go to college, own a home, raise a family, start a business and save for retirement," he said.    For the rest of the story, read April 15th--A Perfect Day for a Presidential Tax Policy Message.

Congress Approves FY 2010 Concurrent Budget Resolution
On April 29, 2009, the House of Representatives voted 233 to 193 to approve the fiscal year 2010 budget resolution (Senate Concurrent Resolution 13). The Senate approved the measure later in the day by a 53-to-43 vote. The $3.5 trillion budget agreement is said to provide $764 billion in tax cuts over a five-year period (including substantial middle-class tax relief), and also is said to support the President's policy objectives of investing in energy, education and health care. It was approved largely along party lines.    For more on this story, please read Congress Approves FY 2010 Concurrent Budget Resolution.