Archive for September, 2009

Don’t forget These 2009 tax breaks!

Plan to exploit them before they expire.

provided by Bradford G Lee, RIS

The year goes by, you get busy … and tax-saving opportunities slip away. So as a reminder, this article is here to reacquaint you with some of the notable federal tax breaks offered this year.

The first-time homebuyer credit. This is the up-to-$8,000 credit available in 2009 to anyone who hasn’t owned a home during the previous three years. (It is subject to phase-outs at certain income levels.) The home you buy has to be your principal residence, and you have to buy it before December 1, 2009. The credit does not have to be paid back.1

The IRA charitable rollover. This is the move that lets your IRA trustee make a tax-free direct transfer of up to $100,000 from your IRA to a charitable organization. This option is scheduled to go away in 2010. You must be age 70½ or older to do this.2

3 don’t-miss deductions for businesses. When it comes to new cars and light trucks used for business means, the maximum first-year depreciation deduction has been increased by $8,000 for cars placed in service before 2010. The Section 179 deduction (that’s the one that lets you write off the costs of certain new and used business assets during their first year of use) is still at $250,000 for 2009, instead of the prior $133,000. The first-year bonus depreciation break of $50,000 is still in place for 2009, and even the biggest businesses can take advantage of it.3

The new car sales tax deduction. Okay, “cash for clunkers” is over, but you still may be able to deduct state and local sales and excise taxes if you buy a car, motorhome, motorbike or light truck. You can itemize the deduction or just add it to the amount of your standard deduction.4

A major tuition tax break. In 2009, you can claim an above-the-line deduction for “qualified tuition and related expenses” relating to the enrollment or attendance of you, your spouse or your dependent at an eligible college or university. While it is subject to phase-outs at higher income levels, the deduction can be as large as $4,000.4

The classroom teacher credit. Are you a primary or secondary school teacher? If you were an educator who worked more than 900 hours on campus in 2009, you can claim an above-the-line deduction for up to $250 of personal expenses for schoolbooks and school supplies that see classroom use. You don’t even have to itemize.4

COBRA continuation. Did you get laid off this year? Were you insured under an employer-sponsored health plan? Well, you may qualify for up to nine months of (COBRA) coverage. As for the company where you worked, it can claim a credit for the COBRA subsidy it extends to you.4

$2,400 in unemployment income tax-free. That’s right: this year, the first $2,400 of federal unemployment compensation benefits you receive are excluded from gross income.4

An extra deduction for state and local property taxes. Do you usually claim the standard federal deduction? If that’s your plan, this year you can take an additional deduction for state and local property taxes. The ceiling is $500, $1,000 if you are filing jointly.5

The capital gains tax break. If you are in the 10% or 15% tax bracket, note that the current tax rate for long-term capital gains is 0% – and it is slated to stay at 0% through 2010.6

The homebuilder tax credit. Do you build homes? If so, you may claim a credit of up to $2,000 for each qualified energy-efficient home constructed and acquired from you for use as a residence. This credit is set to expire December 31, 2009; President Bush’s signature extended it into this year.7

And of course, the exemption from required IRA distributions. The federal tax mandate requiring IRA owners age 70½ to take Required Minimum Distributions (RMDs) was suspended for 2009, but it will be reinstated for 2010. Worth noting: in 2010, anyone will be able to convert a traditional IRA into a Roth IRA.4,8

This is just a sampling. There are other tax breaks out there during this unusual year for the federal tax code, and it is worth asking your accountant or advisor to do some research and/or collaborate to find you as many as possible.

Bradford G. Lee, RIS is a Financial Advisor with SagePoint Financial, Inc

8 Ways to Look and Shop for Bargains

With so many people needing to cut back on their budget, it’s probably a good time to talk about saving money and finding bargains for groceries and household items.

I’ve posted about this before, but it’s a real good time to do it again. Many people just don’t know where to start looking for bargains, so let’s list just a few places to look:

  • Your Sunday and mid-week newspapers.  Your local grocery stores, pharmacies and department stores usually have special prices on “stuff” that can be seasonal as well as year-round items.  TIP – Shop only where you can get the bargains and shop only for those bargains. Resist the temptation to get stuff you don’t need “just ‘cause it’s on sale.”
  • Go to the same Sunday and mid-week papers for coupons.  Yeah,  I know, you don’t want to be a coupon clipper. Just to give you an example of how much money you can save, my Daughter paid $19 and got $38 worth of groceries from one trip to a local grocery store using coupons!  I don’t know about you, but 1/2 off is pretty cool to me.
  • Try different stores.  Don’t go to a certain store ‘cause you “like” the store.  You can learn to “like” a different store or two or three if you can save money and get good product.  And you may be better off trying two or three different stores.
  • Shop in WalMart.  Yeah I know, the media gives them a bad rap because they’re “big business”.  Maybe they are, but you sure get some great bargains.  Not only on name brand products, but on their own brand also.  Just go past your local WalMart and see how crowded the parking lots are now.  The reason is great prices!
  • Shop Sam’s Club or Costco.  It may cost a little bit for a membership, but you more than make up for it in a few months or less. We belong to Sam’s Club and have for many years.  I’ll give you an example of great pricing.  For the past two weeks you can buy a whole boneless pork loin for $1.38 per pound.  The loins average around 10 pounds.  Take it home, put it in your freezer for about an hour just to make the meat a little stiff and then slice it into 1” thick slices.  Talk about great taste!
  • Shop Aldi Food Mart if you have one near you.  Great prices on off-brand products and a lot of name brands.
  • Shop the dollar store for stuff like band aids.  You can get 110 for $1.00.  The off-brands in most drug stores are around $2.50 for 25!
  • Check out organizations like Fare Share Coop.  You pay a certain amount and the organization, mostly volunteers, buys food in large lots and get great bargains.  Go to this link and see the type of foods you get Check for this type of coop in your area.

Well, I’m sure I’m missing a lot of things, but this is a good start for people new to shopping for great bargains.



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