James “Bird” Guess: What You Must Know About Taxes for 2009

By James “Bird” Guess

What if I lost my job?
Over 3 million Americans fell victim to job loss in 2008. Unfortunately, losing your job may create new tax issues. Severance pay and unemployment compensation are taxable. Payments for any accumulated vacation or sick time are also taxable.

What if I am searching for a job?
You may be able to deduct certain expenses while looking for a new job in the same occupation, even if you do not obtain employment. Such expenses may include travel and transportation, copying, printing and mailing of resumes and employment/outplacement agency fees. Stay focused and keep “grindin”

What if my 401(k) dropped in value?

In 2008, Americans lost over $2 trillion in their retirement savings and watched their 401(k)’s be reduced to 201 (k). You cannot claim a capital gains loss on your retirement accounts since they are already receiving favorable tax treatment.

What if I can’t pay my taxes?

You can contact the Taxpayer Advocate Service (TAS) at 1-877-777-4778. TAS, is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, and who are seeking help in resolving tax problems that have not been resolved.

What if I’m missing a W-2
If you have not received your W-2, contact your employer to ask if and when the W-2 was mailed. If it was mailed, it possibly could have been returned to the employer because of an incorrect or incomplete address. If contacting your employer does not resolve the issue and if you have not received your W-2 by February 17th, contact the IRS for assistance at 1-800-829-1040.

What new tax credits are available?
First-Time Homebuyer Credit: This is a fully refundable tax credit (a refund even if you owe no taxes) for first-time homebuyers that can be worth up to $7,500 and is based on the purchase price of the home. The credit, however, is actually a no-interest loan because it must be repaid to the government annually over 15 years ($500/year). Those who purchased a primary residence after April 8, 2008 will qualify. However, a new homebuyer tax credit worth up to $8,000 for the purchase of a primary residence between January 1 and December 31, 2009 will not have to be repaid as part of President Obama’s recently enacted American Recovery and Reinvestment Act. The IRS has stated they are working on implementing and announcing the changes within the next few weeks. Why not take this free money and put it to work by starting a full-time or part-time hustle?

The Recovery Rebate Credit: This credit is similar to last year’s Economic Stimulus Payment except the Recovery Rebate Credit amounts are based on tax year 2008 instead of 2007. Most people already received their full benefit in the form of the Economic Stimulus Payment. However, a taxpayer may qualify for the Recovery Rebate Credit, if, for example, he or she did not get an Economic Stimulus Payment, had a child in 2008 or had a change in income level. If you receive this credit, it will be included in your refund and will not be issued as a separate payment.

Earned Income Tax Credit: This credit is called the “earned income” tax credit because you must work and have earned income to qualify. You have earned income if you worked for someone who paid you wages or you are self-employed. This credit is for people who work, but have lower incomes. A quarter of all taxpayers that qualify don’t claim the credit. If you qualify, it could be worth up to $4,800 this year.

Where can I file my taxes
This year, electronic filing options will speed the payment of refunds to millions of taxpayers. Taxpayers who
e-file and choose direct deposit for their refunds, for example, will get their refunds in as few as 10 days. Compare that to the approximate six weeks it takes for people who file a paper return and get a traditional paper check. Taxpayers can begin filing electronically on January 16, 2009 and can file their taxes online for free through e-file, if their adjusted gross income (total income minus allowable deductions) is $56,000 or less for 2008.

This information is provided for educational and informational purposes only. For complete tax credit information, laws, and eligibility requirements please visit www.irs.gov or consult with your tax advisor.

Source: www.IRS.gov