Tax Refunds Made Easy: Get Money Back for New and Renewed Tax Deductions This Year

Itemized deductions remain largely unchanged, such as mortgage interest, state and local taxes, medical costs, etc. However, standard deductions have increased with your allowable deduction amounts. The standard and increased amounts for 2008 are listed below:

o The standard deduction is $10,900 for couples filing jointly; $5,450 for single filers.

o The increased standard deduction for property taxes is capped at $1,000 for married people; $500 for single filers.

o Addition of standard deduction for taxpayers who are at least 65 years old or blind; $1,050 for each married individual; $1,350 for singles.

[These deduction advantages are ideal for the taxpayer(s) which live mortgage free in a no-income tax state. The advantage here is being able to deduct a total of $14,000 for married/ joint filers both aged 65 or older and had paid at least $1,000 in property tax ($10,900 + $1,000 + $2,100 = $14,000). For the single filer the tax deduction advantage is $7,300 ($5,450 + $500 + $1,350 = $7,300).]

o First-time homebuyers (if purchased after April 8, 2008; or if purchased before June 30, 2009, credit can be claimed for 2008 amended return, if already filed) $7,500 total tax credit for most taxpayers, whether married or single filing jointly with income up to $150,000 and partial tax credit allowed up to $170,000. Full singles tax credit granted for income up to $75,000 and partial up to $95,000.

[The Catch: This credit is essentially an interest free loan and must be repaid over 15 years. If the full tax credit is claimed, $500 will be owed each subsequent year for 15 years beginning in 2010. If the house is sold before full repayment, the balance, limited to the gain on the sale, will be due on your tax return for the year of the sale.]

o Renewed “educator deduction” deduction, qualified teachers can deduct up to $250 of out-of-pocket expenses.

o Renewed state and local sales tax deduction option instead of state and local income taxes.

[Refer to the IRS table Form 1040 listing deductions, based on household size, income & state of residency, an allowable number will be provided. However, if you are analytically organized enough to have kept all of your 2008 purchase receipts, you can deduct the amount you paid in sales tax. In addition, sales tax paid on various large purchases such as a car, boat, home-building materials may be deducted as well.]

o The renewed deduction for tuition and fees paid in 2008 has been extended for any college or graduate education expenses.

[Qualified higher-education costs for married couples filing jointly with incomes up to $130,000 may deduct up to $4,000. Incomes of $130,000 – $160,000 may deduct up to $2,000 only. Single taxpayers & heads of household with an income of up to $65,000 may deduct up to $4,000. Incomes of $65,000 – $80,000 may deduct up to $2,000 only. Deductions may not be applied to a Hope Scholarship or Lifetime Learning students expenses for which a tax credit for 2008 is currently being claimed.]

Of course, this is just a summary of the myriad of standard, itemized, credit, and renewal deductions that are allowed this tax season. My goal is to make people aware of the opportunities out there to help them preserve their hard-earned income and inspire financial wealth. Share this valuable information with whoever you think would benefit and then you too will inspire financial wealth in someone else as they will then come back to you.