Tax tip Tuesday: 2009 tax law changes - WDAM-TV 7-News, Weather, Sports-Hattiesburg, MS

Tax tip Tuesday: 2009 tax law changes

HATTIESBURG, MS (WDAM) - Changes in 2009 tax laws can play a big part on how much you may owe the IRS or how much the IRS owes you.

One of the major changes deals with the first time home buyer credit which was part of the stimulus package.

"The American Recovery and Reinvestment Act expanded it and extended it and we had another law change in November that extended it further and also created or portion for someone who is not a first time home buyer," said Dee Stepter with the IRS.

To receive this credit you have to enter into a binding contract to buy a home before April 30, 2010. You must close on the home on or before June 30, 2010.

Long time resident home buyers get a $6,500 credit, while first time home buyers receive an $8,000 credit.

To receive the credit, you now have to file a 5405 paper return a long with additional information.

"You're now required to send in an additional documentation such as the HUD 1 showing all of the signatures and the settlement for the purchase of that home," said Stepter.

There was also a change that allows you to deduct the sales and excise taxes on the purchase of a new vehicle.

The purchase had to be made after February 16, 2009 and before January 1, 2010.

You can include state and local sales and excise taxes paid on up to $49,500. That amount remains the same if the vehicle purchase price exceeds that number.

The new law allows those who choose the standard deduction to include this on their return.

"It's available to you whether you itemize or not," said Stepter. "Most people who normally file a Schedule A who itemize know that they can deduct sales taxes or they can choose to deduct income taxes."

Taxpayers who do not itemize must complete a Schedule L form.

Copyright 2009 WDAM. All rights reserved.

 

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