2009 tax planning

2009 tax planning

This Fall: 10 weeks of the Alternative Minimum Tax Planning ideas ... Week 3 "Other" deductions

It may seem strange category of business expenses expenditures labeled "miscellaneous deductions and" could affect almost a third of all taxpayers caught in the AMT, but that proves to be the case. This category includes, in addition to work-related expenses are not reimbursed by your employer, like the others, such as tax preparation rates, expenses related to investments, such as fees paid to an investment advisor, trust fees, expenses safe, and all other expenses incurred in relation to income earned is shown on the tax return.

When calculating the regular tax, such expenses are deductible, but only if they exceed a certain percentage. The limitation is 2 percent of adjusted income of the taxpayer in gross or "gross income together." For example, if AGI is $ 100,000, the taxpayer is entitled to a deduction if the total work-related expenses and many more $ 2,000 - but by the excess $ 2,000.

For taxpayers caught in the AMT however, does not allow the deduction of various itemized deductions. The difference between regular tax and AMT is reported on IRS Form 6251 as one of many adjustments that must made in the calculation of taxable income.

A couple of key planning advice here:

First, as all itemized deductions, miscellaneous expenses are eligible to deduct the year is paid cash or in writing and sent by mail, or actually delivering a check. If a credit card is used, the date the charge is placed on the map is the important date, but the credit card is not paid until later when the project comes into play

Second, as we have was preaching with all the other elements such as state and local taxes, the key to the stage of the AMT tax planning is to determine if the taxpayer has sufficient control over the payment of expenses, so he can choose to make a deduction for the year or years to come.

For example, if a taxpayer has filed its 2008 return on maturity Final 15 October 2009 extended, probably not receive an invoice from your CPA about now, in November. In this case, if the taxpayer is in the AMT in 2009, but will not be on the AMT in 2010, makes more sense to pay the bill in January 2010. Although the 2 percent threshold is exceeded in 2010, there will be a tax advantage federal would otherwise be available if the invoice was paid in 2009. Depending on the level of taxation of the individual, these savings could be as high as 35 per cent of the amount of the deductible expense.

There is nothing secret about this opportunity to reduce taxes - Just the same tax base and easily implemented strategy planning as discussed in our previous articles. Estimate your tax situation This year and next - to see if it is inside or outside of the AMT - and then simply pay the bill for the year more advantageous, it is all there is the same thing.

About the Author

George Bauernfeind is with AMTIndividual.com, providing analysis, customized strategies, and an online dual tax calculator / planner to help you reduce your Alternative Minimum Tax. Visit www.amtindividual.com or www.amtblog.com to read more articles on the Alternative Minimum Tax.

Are we eligible for a first time home buyer tax credit? Is the income limit based on 2008 or 2009 income?

For fiscal year 2008, full of a joint statement. Our AGI for this year is less than 150K. We are planning to purchase / close a home before 2009 We are in November for the first time home buyer. For fiscal year 2009 (January 2009-December 2009), our AGI will be higher than 170K. If it happens, we may be able to get credit tax? Is the income limit based on 2008 revenue or income of 2009 or the lesser?

Since they are under the AGI limit for 2008 and for 2009, go ahead and amend its 2008 return, you need your HUD-1 statement, a Form 1040X and 5405. Mailed to you IRS and allow about 16 to 20 weeks for processing.

Luscombe: Year-end Tax Planning for 2009

 

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2009 tax planning