You may have heard the expressions “make hay while the sun shines” or “strike while the iron is hot.” These old proverbs are particularly relevant to current tax laws. More and more often, Congress is enacting tax breaks on a temporary basis—creating “limited time only” offers.
Some of these temporary breaks may eventually be extended by Congress, but others may not be. So, where practical, you may want to take advantage of the breaks while they are available.
To help get you started, here are a few breaks that are currently set to expire in 2009.
If you claim the standard deduction for 2009, you may also claim an additional deduction for real estate property taxes.
Whether you claim the standard deduction or itemize your deductions for 2009, you can deduct the sales tax you pay on a car or truck purchased by December 31, 2009 (but the deduction is phased out if your income is too high).
If you itemize your deductions for 2009, you can choose to deduct state and local sales taxes instead of claiming a deduction for state income taxes.
If you buy a principal residence by December 1, 2009 and haven’t owned a home during the prior three years, you are entitled to a tax credit of up to $8,000 (but again, there is a phase-out if your income is too high).
If you are age 70 ½ or over and own an IRA, you don’t have to withdraw any funds from your IRA in 2009 unless you wish to.
There are other breaks scheduled to expire in 2009 and still others will expire in 2010. If you would like more information, please contact us.