The end of the year is quickly approaching and as many of us become distracted by the multitude of activities associated with the holiday season, some important financial decisions can fall between the cracks. Over the last several weeks, we've tried to emphasize the importance of looking at the various credits and deductions available to you and implementing them into your planning with the help and advice of your CPA. Today, we're going to focus on a few last matters for your 2009 planning.
Let us first highlight some unique opportunities available to businesses in the current tax climate. If you are a business considering the purchase of a business vehicle that would be subject to the 280F depreciation limitations, you can receive up to an additional $8,000 in depreciation deductions if the vehicle is acquired AND placed in service by the end of the 2009 calendar year. Contact your accountant to further discuss what vehicles may qualify and if this plan of action makes sense for you.
Next, if you are an S Corp who found yourself in the position of repurchasing your own debt for less than the adjusted issue price or you had all or a portion of your indebtedness forgiven, you can elect to defer the income for 4 years and then report the income over the subsequent 5 years. Additionally, if the taxpayer is bankrupt or insolvent, then all or a portion of the income realized from the repurchase or forgiveness of business debt may be excluded.
Now, moving to the individual, if you found yourself in the tough position of claiming unemployment pay this year, please keep in mind that you can exclude up to $2,400 from your federal income taxation for 2009 only. Additionally, if you did not elect to have withholding taken from your unemployment payments, it could create an unexpected surprise come tax time. Please consult your CPA if you feel this may be an issue for you.
A classic end of year tax planning tip has always been to bunch your itemized deductions, such as property tax payments, into the current year. This tip still holds true in 2009 for those taking itemized deductions. However, non-itemizers can also get a boost to their 2009 Standard Deduction by claiming an additional "Standard Deduction" amount for state and local property taxes you pay. This deduction is limited to the lesser of $1,000 filing jointly ($500 if filing single) or the actual real estate taxes you paid. This deduction does not help those of you out there who take itemized deductions. However, if you are planning to take a Standard Deduction in 2009 and you are holding a current property tax bill that will help you meet the $1,000 cap, then be sure to pay that bill before the end of 2009 to maximize this additional "Standard Deduction" opportunity.
As we move into next week, we are going to shift our focus from the End of the Year planning into a mode where we start planning for 2010 and beyond. First up on our list is to tackle issues and opportunities related to the new version of the First Time Homebuyers Credit.
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704.544.8429
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