Haiti Relief Donations Qualify for Immediate Tax Relief

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People who give to charities providing earthquake relief in Haiti can claim these donations on the tax return they are completing this season, according to the Internal Revenue Service. Taxpayers who itemize deductions on their 2009 return qualify for this special tax relief provision, enacted Jan. 22. Only cash contributions made to these charities after Jan. 11, 2010, and before March 1, 2010, are eligible. This includes contributions made by text message, check, credit card or debit card. The new law only applies to cash (as opposed to property) contributions. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti. Taxpayers have the option of deducting these contributions on either their 2009 or 2010 returns, but not both.

Low- and moderate- income workers can be eligible for the Earned Income Credit (EIC).  EIC is a refundable credit meaning that the amount of credit that is greater than the taxes due (owed) is refunded to the taxpayer.

The amount of the credit depends on the taxpayer's Adjusted Gross Income (AGI) and the number of qualifying children.  You may qualify if you earned less than $48,279 for 2009.  New for 2009 is the additional benefit for the 3rd qualifying child.  The maximum credit is $457 with no qualifying child, $3043 with one qualifying child, $5028 with two qualifying children, and $5657 with three or more qualifying children.

Remember, EIC is not available for the married filing separate status.  Also note the qualifying child does not have to be a relative.


Contact your tax professional today for assistance. 


To do-it-yourself, click here to files your taxes online

FYI,

The IRS will start accepting efiled tax returns on Friday, January 15, 2010.  You will need your actual W-2 in order to efile your return.  The IRS will not accept last pay stubs for efile processing.  Also, note that returns filed between January 15 - January 21, direct deposits will process on January 29 and paper checks on February 5.

Beginning in 2011 the IRS will require all tax preparers to take pass an examination.  These requirement will exclude certified public accountants, attorneys, and enrolled agents.  California and Oregon are the two states that I'm currently aware that have already imposed this requirements in previous years.  First, all preparers will be required to register with the IRS and receive a PTIN which is a preparer tax identification number.  The preparers will then choose between taken an individual 1040 or business 1040 examination.  Furthermore, the preparers will be required to obtain a certain number of continuing education credits.

Although, as a tax preparers that does not fall within the excluded groups, I welcome the support the new rules.  However,  I am interested in seeing how all of this play out especially considering the number of tax preparers hired by the national tax chains like Jackson Hewitt and H & R Block.  My speculation is that the pool of "qualified" tax preparers is going to be greatly decreased thereby causing a great increase in the cost of tax preparation. 

My question of the new rules is does it include someone that just might enter basic data but does not actually prepare the return.

Welcome to my blog.  Most of my discussions will be tax related as that's my line of work.  However, I will from time to time discuss other issues that I find it necessary to voice my opinion about.

Well the 2010 tax season is upon us and it time to pay the piper or hopefully get paid.  There were several changes in the tax laws that will affect preparation of the 2009 income tax return.  First, for those that received unemployment benefits for 2009, you can now exclude up to $2400 in benefits from your income irregardless of total income.  Next, there's the Schedule L used by certain filers to claim standards deductions beyond the basic deduction, which include real property tax deduction and motor-vehicle sales tax deduction.   Then there's the Making Work Pay Credit and the additional qualifying child for the Earned Income Tax Credit (EITC). 

I'm really excited about this coming tax season and I'm ready to get started.  Please note that the IRS will begin accepting e-files on January 15, 2010.  Also, for e-files transmitted and accepted between January 15 - 21, refunds will be direct deposited  on January 29, 2010 or paper check mailed on February 5, 2010.


Get your documents organized and make preparing your taxes and lot less taxing.

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