IRS offers tax season tips

Submitted by the Internal Revenue Service

The 2009 filing season launched Friday with a new look for the popular IRS Web site, improved online tools, new tax laws and enhanced electronic services that will better assist taxpayers and tax preparers.

“In Georgia, the IRS expects to process about 4 million individual tax returns and expects continued growth for IRS e-file, with 2.8 million Georgians expected to file electronically” said IRS spokesman Mark S.Green.

The agency surpassed an important milestone last year as nearly 90 million returns were e-filed nationwide.

“This year everyone has the option, if eligible, to use Free File,” Green said. If your adjusted gross income in 2008 was $56,000 or less, you are eligible to use one of the interview-based products that will guide you through the process of preparing your return, or if your income was above $56,000 you can use the Free File Fillable Forms product to complete your tax return and file it electronically. This option is best for folks who are comfortable with the tax laws, know what form (s) they need to use and, who don’t need assistance completing their returns.”

Here are some of the new laws to consider:

• First-Time Homebuyers Tax Credit: First-time homebuyers should begin planning now to take advantage of a new tax credit available for a limited time. The credit applies to primary home purchases between April 9, 2008 and June 30, 2009. This tax credit must be paid back in equal payments over 15 years. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. First-time homebuyers are those who have not owned a home in the three years prior to a purchase.

• Real Estate Tax Deduction: There is an additional standard deduction for those who don’t qualify to itemize their tax deductions, but pay real estate taxes. The additional deduction amount is equal to the amount of real estate taxes paid up to $500 for single filers or up to $1,000 for joint filers. This deduction is available for the 2008 and 2009 tax years. This property tax deduction is in addition to the standard deduction used by filers.

• Tuition and Fees Deduction: You may be able to deduct qualified tuition and required enrollment fees up to $4,000 that you pay for yourself, your spouse, or a dependent. You do not have to itemize to take this deduction. However, a taxpayer cannot take both the tuition and fees deduction and education credits (Hope & Lifetime Learning Credits) for the same student in the same year. Income limits and other special rules apply to each of these provisions. To determine whether your expenses are qualified, refer to IRS Publication 970, Tax Benefits for Education. IRS Publication 970 also describes other education-related tax benefits.

• Educators’ Out of Pocket Expense Deduction: The educator expense deduction allows teachers and other educators to deduct the cost of books, supplies, equipment and software used in the classroom. Eligible educators include those who work at least 900 hours during a school year as a teacher, instructor, counselor, principal or aide in a public or private elementary or secondary school. Worth up to $250, the educator expense deduction is available whether or not the educator itemizes deductions on Schedule A.

• Recovery Rebate Credit: If you did not qualify or did not receive the maximum amount for the 2008 Economic Stimulus Payment you may be entitled to a Recovery Rebate Credit when you file your 2008 tax return. Review the tax return filing instructions including the Recovery Rebate Credit worksheet.

• Recordkeeping: Are your tax records organized? The IRS encourages taxpayers to take the time now to gather and organize their records to reduce stress at tax time. Check out the latest tax changes on the IRS.gov Web site and remember to e-file your tax return which helps ensure you do not miss out on any tax deductions, credits and benefits.

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