2009 Irs Rules on Sales Tax on New Cars

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2009 Irs Rules on Sales Tax on New Cars Powered By Docstoc
					What’s New This Tax Season?
     Federal Tax Law Changes
            for TY 2009



     Tim Pickney, IRS SPEC,
         Richmond, VA
       November 19, 2009

                              EITC/Matched Savings
                                 Training Series
                                   2009 - 2010
                              Welcome!
  Thank you for coming to today’s training
      Made possible by a grant from the U.S.
       Department of Health and Human Services,
       Administration for Children and Families,
       Office of Community Services
      Facilitated by the State Information
       Technology Consortium (SITC)
           Kathy Beckman, Facilitator
           Monica Adams, Event Manager


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    Training series planning team




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                        How it works
  Participants at their desktops
      View and hear speaker’s presentation
       online
      Can interact with speaker via on-line
       chat
  Session is recorded for later online
   playback
  Length: 1 hour
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    Who is this training series for?


    Community Action Agencies
    EITC coalitions and their members
    Community-based organizations
    Others working to help Virginians
      build assets
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   How can this training benefit you?

  Gain up-to-date information
  Interact with speaker and others to:
      Get questions answered
      Share practical tips
  Develop a library of free, online
    training for your agency’s members
    and volunteers
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               Today’s training will..

  Highlight key information on Federal
   tax law changes for TY 2009,
   focusing on low-income VITA
   customers
  Help you find answers to your
   questions about these changes


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                                  Q&A
                              At any time, you can submit a
                              question online. Just type your
                              question into the “Chat Q&A” box
                              at the top left of your screen.
      Chat Q&A

       Type here              Type your question in the white text
                              box next to “Question:”. Then
                              press the arrow to send it to the
                              speakers. Speakers may respond
                              right away, or during the Q&A
                              session.

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        Poll: Who’s with us today?
    Community Action Agencies
    EITC coalitions and their members
    Community-based organizations
    Others working to help Virginians
    build assets



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                  Speaker Welcome




                       CAROLYN SPOHRER
                        Deputy Director, VACAP



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               Today’s speaker is…




                              TIM PICKNEY
       Senior Stakeholder Relationship Tax Consultant
  IRS Stakeholder Partnerships, Education & Communication
                            (SPEC)
                       Richmond, VA                    11
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    AMERICAN RECOVERY AND
      AMERICAN RECOVERY
     AND REINVESTMENT ACT
         OF 2009 (ARRA)


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       “Making Work Pay” Tax Credit
     Will cut taxes for working families
     Up to $400 ($800 if MFJ)
     Refundable
     Phase out for taxpayers with modified AGI >
      $75,000 ($150,000 MFJ)
     Claim credit on 2009 tax return
     Tax withholding decrease (begin by 4/1/2009)
      to anticipate credit
     Revised Form W-4 not necessary for
      automatic withholding change
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                 Important Message
     Taxpayers that have more than one job at the same time
      are at risk for being under withheld, since they are entitled
      to only one credit
     Taxpayers who are married with both spouses working
      may also be under withheld
     Combined income from two jobs or spouses who both
      work put taxpayers in a higher tax bracket
     Only taxpayers with valid Social Security numbers are
      eligible for the Making Work Pay Credit (or at least one
      taxpayer, if MFJ)
     Pension recipients with no earned income are not eligible
      for the Making Work Pay Credit and may be under
      withheld
     Taxpayers who can be claimed as dependents on
      someone else’s tax return are not eligible for the credit
      and may be under withheld
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        Economic Recovery Payment

     SS, SSI, RR, Veterans Disability Recipients
     $250 – one-time payment (not from IRS)
     Reduces “Making Work Pay” Credit, if eligible
     No phase out
     Not income for income tax purposes
     Contact respective agency for more
      information


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  Credit for Certain Government Federal
             and State Retirees
  Certain government retirees will receive a
   one time $250 refundable credit on their
   2009 tax return filed in 2010
  For government retirees who receive a
   pension from work not covered by Social
   Security



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        Earned Income Tax Credit (EITC)
                   Increase
 Earned Income and adjusted gross income
    (AGI) must each be less than:
 $43,279 ($48,279 married filing jointly) with three or more qualifying
    children
   $40,295 ($45,295 married filing jointly) with two qualifying children
   $35,463 ($40,463 married filing jointly) with one qualifying child
   $13,440 ($18,440 married filing jointly) with no qualifying children

 Tax Year 2009 maximum credit:
   $5,657 with three or more qualifying children
   $5,028 with two qualifying children
   $3,043 with one qualifying child
   $457 with no qualifying children
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                    Child Tax Credit

    $1,000 per qualifying child
    Refundable portion – eligibility
     increased
    More lower income families qualify:
       2008 – threshold amount = $8,500
       2009 – threshold amount = $3,000
       2010 – threshold amount = $3,000
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    “American Opportunity” Education
               Tax Credit
    Expands HOPE Credit – available for
     first 4 years of post-secondary
     education
    For 2009 and 2010 maximum credit is
     $2,500
    40% refundable
    Phase out for taxpayers with modified
     AGI > $80,000 ($160,000 MFJ)
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 First-Time Homebuyer Credit Amended

    Increased to $8,000
    Refundable
    Homes purchased from 1/1/2009
     through 11/30/2009
    No repayment (must live in home 3
     years)
    Can choose to claim on 2008 return
    Phase out for taxpayers with modified
     AGI > $75,000 ($150,000 MFJ)
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  Portion of Unemployment Benefits are
               Nontaxable
    Temporary suspension of the federal income tax
     on first $2,400 of unemployment compensation
    Unemployment compensation over $2,400 will
     be subject to federal income tax
    Any requested withholding on unemployment
     compensation will continue to apply to the full
     amount paid.




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     Energy Conservation Incentives
   Federal Tax Credits for Energy Efficiency includes:

         Modification in residential energy efficient property
          for solar water, wind, and geothermal heat pump
          property expenditures
         Tax credits are available at 30% of the cost, up to
          $1,500, in 2009 & 2010 (for existing homes only)
          for:
             Energy-Efficient windows and doors, insulation,
              roofs (metal and asphalt), HVAC, water heaters
              (non solar), biomass stoves
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                   Sales Tax Deduction
                    on New Vehicles
    State, local & excise taxes paid in 2009
    Cars, light trucks, motor homes,
     motorcycles
    Purchases after 2/16/2009
    Taxes paid on first $49,500 of cost
    Phase out for taxpayers with modified
     AGI > $125,000 ($250,000 MFJ)
    Do not have to itemize to take deduction

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    Qualified Higher Education Expense
             (Sec 529 Accounts)
  Qualified Tuition Programs (QTPs)
  Computer technology and equipment
   allowed as a qualified higher education
   expense
  Effective for expenses paid or incurred in
   2009 and 2010.




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           2009 Tax Law Changes
        For 2009, the following changes
       have been made to the definition of
               a qualifying child.
      To be your qualifying child, the child must be younger than
       you.
      A child cannot be your qualifying child if he or she files a
       joint return, unless the return was filed only as a claim for
       refund.
      If the parents of a child can claim the child as a qualifying
       child but no parent so claims the child, no one else can
       claim the child as a qualifying child unless that person's
       AGI is higher than the highest AGI of any parent of the
       child.
      Your child is a qualifying child for purposes of the child tax
       credit only if you can and do claim an exemption for him or
       her.                                                           28
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           2009 Tax Law Changes
      Deduction for Credit or Debit Card
              Convenience Fees
     If you pay your income tax (including estimated tax
     payments) by credit or debit card, you can deduct the
     convenience fee you are charged by the card processor
     to pay using your credit or debit card. The deduction is
     claimed for the year in which the fee was charged to
     your card as a miscellaneous itemized deduction on line
     23 of Schedule A (Form 1040) (and is subject to the 2%
     of adjusted gross income floor).




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           2009 Tax Law Changes
     New Rules for Children of Divorced
           or Separated Parents
      A noncustodial parent claiming an exemption for a
      child can no longer attach certain pages from a
      divorce decree or separation agreement instead of
      Form 8332 if the decree or agreement was executed
      after 2008. The noncustodial parent must attach
      Form 8332 or a similar statement signed by the
      custodial parent.

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           2009 Tax Law Changes
   The following items are not taxable for
        federal income tax purposes
    Vouchers/payments received under the CARS (Cash for
     Clunkers) program
    COBRA health care coverage continuation premium
     subsidy payments
    Pay-for-Performance Success Payments that reduce
     your home mortgage



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           2009 Tax Law Changes
     United States Savings Bonds for
           the 2010 filing season
    President Obama announced that IRS will
     provide taxpayers with an opportunity to
     purchase United States Savings Bonds with their
     tax refunds. IRS is working with the Treasury
     Department and the Bureau of Public Debt on
     implementation details


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                  More Information?
  Go to www.IRS.gov
  Check Web site frequently for the
   latest updates
  Contact your IRS SPEC
   Relationship Manager


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                                  Q&A
                              At any time, you can submit a
                              question online. Just type your
                              question into the “Chat Q&A” box
                              at the top left of your screen.
      Chat Q&A

     Type here                Type your question in the white text
                              box next to “Question:”. Then
                              press the arrow to send it to the
                              speakers.



                                                                 34
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                              Contacts

  1.       Your IRS SPEC Relationship Manager
  2.       Carolyn Spohrer, VACAP
            www.vaeitc.org
            (804) 644-0417
            cspohrer@vacap.org




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                          Next Training

 Date:         Thursday, December 10, 2009
 Time:         9am – 10am ET
 Topic:        VA Tax Law Changes – TY 2009
 With:         Valerie Bruffey, COR, Alleghany
                County


                        Register now at:
   http://www.sitcsurveys.vovici.net/se.ashx?s=7A7D6FD3496E8313


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                              Wrap up
  Thanks to all speakers and
   participants in today’s Webinar!
  A recorded version of this Webinar
   will be available online in about 2
   weeks.
  All recorded Webinars available at:
   http://www.state-
   itc.org/building_assets.html

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      Please give us your feedback
      Then press Submit
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