Bible Money Matters

Christian personal finance

Menu
    • About
    • Archives
    • Contact
    • Close
  • Making Money
      • Popular Articles

        • 50 Ways To Make Money: Maximizing, Creating And Increasing Your Income
        • 10 Weird And Unconventional Ways To Make Money
        • Making Money With A Blog (e-Book)
        • 10 Places To Sell Or Trade Your Unused (Or Broken) Electronics
        • Ways To Make Extra Money Series: 20 More Income Generating Ideas From Our Readers
        • Making Side Income Can Help Blunt The Impact Of Becoming A One Income Family
        • Earn Cash Back With Discover it® Credit Card
      • Recent Articles – Making Money

        • Best Sites Like Fiverr To Make Money As A Freelancer
        • 13 Of The Best Independent Contractor Jobs
        • 25 Of The Best Gig Economy Jobs
        • How To Make Money Blogging: Turn A Blog Into A Business
      • Categories

        • Making Money
        • Investing
        • Retirement
        • Jobs & Work LIfe
        • Money
        • Income
    • Close
  • Saving Money
      • Popular Articles

        • 50 Easy Ways To Save Money Every Month
        • 10 Weird And Unconventional Ways To Save Money
        • 10 Practical Ways To Save Money And Increase Your Net Worth
        • How To Save Money On Just About All Of Your Regular Monthly Bills
        • Ways To Watch TV Without Paying An Arm And A Leg For Cable TV
        • Save Money On Your Hospital Bill - Just By Asking
      • Recent Articles – Saving Money

        • How To Save $100k In 7 Practical Steps
        • Stairs App Review: Save And Invest To Earn 4-6% Interest
        • Honey Review: Save Money Automatically When You Shop Online
        • 9 Convincing Reasons Why You Need An Emergency Fund
      • Categories

        • Saving Money
        • Frugality
        • Planning
        • Finance
        • Saving For Retirement
        • Savings Accounts
    • Close
  • Banking
      • Best Rates For 2019

        • Best Credit Cards
        • Best Savings Accounts
        • Best Mortgage Rates
        • Best CD Rates
        • Best Brokerages
        • Free Credit Scores
      • Recent Reviews

        • TradeStation Review: Commission Free Stock And ETF Trades
        • Firstrade Review: Commission Free Trades on Stocks, Crypto, And Options
        • Cadre Real Estate Investing Review: Commercial Real Estate Investing
        • Axos Self Directed Trading Review: Invest, Trade Stocks For Free
      • Categories

        • Bank & Software Reviews
        • Investing
        • Credit
        • Banking
        • Mortgage
        • Insurance
        • Family Budget
    • Close
  • Recommended
  • Video
    • Close

Tax Changes: Credits, Deductions And Laws To Keep In Mind

By Contributing Author 3 Comments - The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited July 16, 2010.

Share
Pin
Tweet
Share
0 Shares

The following is an article by Back Taxes Help, LLC a company that helps taxpayers resolve major IRS tax problems. To keep up to date on tips, guidance, and news subscribe to their tax blog today.

With 2010 half way over, it is not too soon to start preparing your tax return for next year. There are tax deductions that stayed the same, those that changed, those that were eliminated and even those that could affect you. With 2009 having been a unique tax year, which included an abundance of new credits in hopes to help struggling Americans, there are some changes and tax laws in 2010 to be cognizant of this year with the potential of changes yet to come. Some of these tax changes may be reversed if the HR 4213 bill is passed.

Quick Navigation

  • Home-Buyer Tax Credit Expiring
  • Complete Repeal of Estate Tax in 2010
  • Disappearance of Sales Tax Deduction
  • Disappearance of Vehicle Sales Tax Deduction
  • Energy Savings Tax Credit
  • First $2400 in Unemployment Benefits Taxable Now
  • Capital Gains Tax Rates and Dividends
  • Disappearance of Teachers or Education Supplies Tax Deduction
  • Additional Standard Deduction for Property Taxes
  • Changes to Roth IRS Conversions
  • Changes to the Alternative Minimum Tax 2010

Home-Buyer Tax Credit Expiring

One tax credit this year that expired was the homebuyer tax credit. If you purchased a home before April 30th, 2010 or had a contracted signed by then and you closed by September 30th, you can claim this tax credit on your 2010 tax return (if you did not claim it on your 2009 tax return). HR 5623 extended the closing deadline until September 30th, 2010 instead of the original June 30th deadline.  Find the details here.

Complete Repeal of Estate Tax in 2010

The Economic Growth and Tax Relief Reconciliation Act of 2001, phased out the estate tax over 10 years, with 2010 being the year it is completely phased out. Some Congressman have stated they will address the issue, but we have not seen anything thus far. Some think Congress will retroactively impose 2009 estate tax rates for the 2010 tax year. In 2011, the estate tax is expected to go back to the 55% level for estates worth 1 million dollars or more.

Disappearance of Sales Tax Deduction

Last year and before, individual taxpayers itemizing deductions on Schedule A could claim a state sales tax deduction against Federal income taxes. Realize that when itemizing deductions, taxpayers have to select between declaring a deduction for state and local income taxes or state and local sales taxes–they cannot claim both (except in 2009). This tax deduction seems to be dead for 2010, as the senate recently failed to address it, but it could be extended. The disappearance of the sales tax deduction will not impact most taxpayers as typically state and local income taxes are much greater than sales taxes paid. However, for individuals in a state without any income taxes, this will truly affect them.

Disappearance of Vehicle Sales Tax Deduction

In 2009, taxpayers could deduct the sales tax paid on a brand new motor vehicle (purchased between 2/16/09 and 1/1/2010) which included new cars, light trucks, motorcycles, and mobile homes in addition to local and state income taxes. Moreover, taxpayers (below income thresholds) could claim the sales tax deduction on the first $49,500 paid for the vehicle regardless of whether they itemized or not. In any event, this tax deduction has not been extended for 2010 yet. Therefore, in 2010, taxpayers who itemize have to decide whether to take the state/local sales tax deduction or state/local income tax deduction.

Energy Savings Tax Credit

Even though this tax credit is a continuance from last year, it is important to be aware that 2010 is the last year (unless renewed) this will be in effect for existing homes (principal residence) making energy improvements as it pertains to windows, doors, insulation, HVAC equipment, water heaters and biomass stoves. The tax code allows a taxpayer to take a credit for 30% (up to $1500) of the cost of equipment, so long as it is an existing home and the principal residence (new construction and rentals do not qualify). Therefore, if you were thinking about making energy efficiency moves soon, do so before year end.

First $2400 in Unemployment Benefits Taxable Now

In 2009, the first $2400 in unemployment benefits were not taxable. This year, unfortunately, the first $2400 in unemployment compensation is taxable this year.

Capital Gains Tax Rates and Dividends

In 2010, the capital gains tax rates will remain at 0 for taxpayers in the 10% and 15% tax brackets. Furthermore, dividends for 2010 Long term capital gains will be 15% for those in higher tax brackets with rates expected to climb in 2011. Income tax bracket percentages are expected to climb as well in 2011 with the Bush tax cuts expiring.

Disappearance of Teachers or Education Supplies Tax Deduction

In 2010, teachers, professors, and others cannot deduct up to $250 dollars they spent to buy classroom supplies. This deduction was nice because it did not require a taxpayer to itemize. However, it could still be extended with the current legislation being considered.

Additional Standard Deduction for Property Taxes

In 2008, the Housing Assistance Tax Act of 2008 provided tax relief to homeowners by allowing them to deduct an additional $500 (if single) or $1000 (if filing jointly). Normally, if a taxpayer does not itemize, they are better off taking the standard deduction. This additional deduction allowed them to deduct property taxes in addition to the standard deduction. This tax deduction expired this year, unless Congress extends it.

Changes to Roth IRS Conversions

In 2010, there is no income restriction on converting a traditional IRA or 401k to a Roth IRA in 2010. In fact, if you make a conversion in 2010, you can elect to pay half the taxes in 2011 and the other half in 2012. This election to defer taxes is only possible if you convert this year. More importantly, high wage earners can now contribute to a simple IRA or 401k and then convert to a Roth IRA, effectively getting around contribution limits on Roth IRAs. If you are considering converting to a Roth IRA from a 401k for example, it is important to speak to a financial advisor or tax professional in order to avoid potential tax problems.

Changes to the Alternative Minimum Tax 2010

As part of the American Recovery and Investment act in 2009, congress raised the Alternative Minimum Tax exemption income levels for both single filers and married couples filing jointly and separately. Unless Congress makes changes, the AMT exemption levels will decrease substantially as follows: $33,750 from $46,700 for single filers; to $45,00 for married couples filing jointly from $70,950; and to $22,500 for married couples filing individually from $35,475.

Although this list is not all inclusive, it fairly covers important tax law changes including alterations to tax deductions and tax credits that may impact you. With any tax changes, it is important to consider speaking with a tax professional ahead of time in order to avoid any potential IRS tax problems.

Can you think of any other important changes coming down the pipe that we should all be aware of? Tell us in the comments!

Related Posts

  • 10 Tax Deductions And Credits That You Can Still Claim In 2010

    The end of the year is quickly coming upon us, and with it comes your last chance to take advantage of some last minute tax…

  • 10 Year End Tax Deductions And Credits That You Can Claim In 2009

    It's the last week of the year, and it's your last chance to take advantage of some last-minute tax deductions for 2009. If you're anything…

  • Top 10 Tax Credits To Take Advantage Of

    This is an article from PT over at PTMoney.com. Head on over to his site and subscribe to his RSS feed, or to get his…

Share
Pin
Tweet
Share
0 Shares
Last Edited: 16th July 2010 The content of biblemoneymatters.com is for general information purposes only and does not constitute professional advice. Visitors to biblemoneymatters.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.

This article is about: Taxes

About Contributing Author

We love to mix it up from time to time here at Bible Money Matters. Would you like to write for us as well? Please email us via the contact page with your article idea.

Comments

    Share Your Thoughts: Cancel reply

  1. Jason @ one money design says

    Too bad about the sales tax deduction. I’m one of the few who live in a state without state taxes (Texas). I also hate to see the teachers and education supplies deduction goes. My wife used to teach school full-time and we found this helpful. There are many supplies and things teachers invest in themselves to make the learning experience better for children.

    Reply
  2. kt- lifedividend says

    taxation in my country is so complex that very few people file their own paperwork(i also dont like fiddling with tax things besides having a general view and knowing the tax deductions i am entitled to). Needless to say tax experts are making a killing because they are the only ones that know their way around the mess that is the tax system. Times must be very good for them; that is if they can get past the boredom caused by all that paperwork

    Reply
  3. David/moneycrashers says

    Just another reason for me to continue to count the days until Obama and all his minions are swept out of office.

    He could at least do away with taxing the unemployment beneifits. I’m not unemployed so it doesn’t affect me, but still.

    HE hasn’t solved unemployment yet, and he’s still going to stick it to those people?

    What a guy…

    Reply
Previous Post: $8,000 and $6,500 Homebuyer Tax Credits Extended Again Through September 2010 Via H.R.5623
Next Post: Will The 2001 Bush Tax Cuts Be Extended, Made Permanent Or Allowed To Expire?
Discover Investment Platforms

Popular Posts

  • 21 Easy Ways To Earn Free Amazon Gift Cards
  • 10 Best Free Tax Filing Services And Software Online
  • 21 Apps That Pay You Real Money Fast
  • 17 TV Apps And Live TV Streaming Services To Watch TV Free
  • 30 Legit Online Jobs That Pay Well
  • 37 Easy Ways To Get Free Gift Cards
  • How To Get Free Stock
  • 40 Easy Ways To Get Free Money Fast
  • 21 Places To Read Free Books Online
  • 24 Legit Online Jobs
  • 17 Best Work From Home Jobs: A List Of Legit Online Jobs That Pay Well

Recent Posts

  • Enjoy Your Memorial Day But Let’s Remember Those Who Gave The Ultimate Sacrifice
  • 30 Quotes About Easter And Resurrection: He Is Risen!
  • 30 Happy Birthday Bible Verses To Celebrate, Encourage And Give Strength
  • How To Save $100k In 7 Practical Steps
  • How to Save Money When Remodeling A Home
  • How To Hire A Contractor For Your Remodeling Project
  • Remembering 9/11 Years Later: Where Were You On That Fateful Day?
  • TradeStation Review: Commission Free Stock And ETF Trades
  • Firstrade Review: Commission Free Trades on Stocks, Crypto, And Options
  • Cadre Real Estate Investing Review: Commercial Real Estate Investing

Disclaimer

The information contained in BibleMoneyMatters.com is for general information or entertainment purposes only and does not constitute professional financial advice. Please contact an independent financial professional for advice regarding your specific situation.

In accordance with FTC guidelines, we state that we have a financial relationship with some of the companies mentioned in this website. This may include receiving access to free products and services for product and service reviews and giveaways.

Any references to third party products, rates, or websites are subject to change without notice. We do our best to maintain current information, but due to the rapidly changing environment, some information may have changed since it was published. Please do the appropriate research before participating in any third party offers.

Amazon and the Amazon logo are trademarks of Amazon.com, Inc. or its affiliates.

We respect your privacy: Privacy Policy.

Thanks for visiting!

Bible Money Matters - Seen On These Sites and more..
Bible Money Matters is a personal finance, entrepreneurship and investing community. Give more, save more and live more.

Copyright © 2023 · Bible Money Matters | Sitemap | Advertise | Privacy Policy