Doron F. Eghbali Business Law Blog on Lawyers.com

Year-End Tax Tips for 2009

Saturday, November 28, 2009 by Doron F. Eghbali

Here are some of the tax tips for 2009:

New Car Purchases

Taxpayers who purchase a new car before January 1, 2010 may be able to deduct sales and excise taxes, fees and other costs up to $49,500 of the purchase price. This incentive to buy new cars is phased out for single taxpayers with modified adjusted gross income between $125,000 and $135,000. The Phase out for married couples filing jointly is between $225,000 and $260,000 of their modified gross adjusted income.

Retirement Savings:401K

You can still put up to $16,500 and $22,000 (if you are over 50) into your 401K.

Investments

Take losses. Many investors might still have suffered some long-term capital losses on investments held longer than one year. You can deduct up to $3,000 of your capital losses against ordinary income with the rest to be carried forward for use to future years. One caveat is that the investment must have been in cash as opposed to IRAs or other tax-sheltered retirement plans.

In addition, capital losses could be matched dollar for dollar against long-term capital gains. So, if you had $20,000 of long-term losses on some investments and $15,000 of capital gains on some long-term investment, after $3,000 deducted from your ordinary income, your net loss to carry forward is $2,000.

Posted at 10:46 AM

Topic: Business Law