This post was contributed by a community member. The views expressed here are the author's own.

Politics & Government

The Tax Man Cometh

Here's help for some of the taxable deductions, credits and tax law changes.

It's a daunting task that few ever really enjoy taking on. In fact, most of the U.S. population shudders at the thought of going face-to-face with the IRS in a death match for our hard-earned income. But is there really that much to be leery about?  Knowing the rules of the tax game are more important than ever. So grab a cup of coffee and let's go over a few of the changes you may have to ask your tax preparer about.

Let's start with the easy things to remember: 

  • You can still drop off items at local charities until close of business on Dec. 31. Make sure you receive a receipt with their name and address on it. Attach backup information: what you donated, its condition and its fair market value. There are several wonderful programs such as "It's Deductable" by Turbo Tax and "Deduction Pro" by H&R Block to help you determine the value of your donations.
  • You cannot legally claim a deduction greater than the value of the item you're deducting. Simply put: If you attend a charity auction and bid on two Super Bowl tickets with a face value of $1,000 each. And let's say your bid is the winning bid you at $4,500. You cannot claim the full amount you paid at the auction, you can only claim the actual value of the item.
  • According to the Social Security Administration, W-2's need to be distributed to employees by Jan. 31. If you haven't received yours by that date, contact your employer.
  • Itemized deductions limitations expired in 2010. However, under current legislation you will be able to claim some deductions at the pre-2006 year rate.

Now you're ready to hit the more advanced topics.

Find out what's happening in Oaktonwith free, real-time updates from Patch.

Alternative Minimum Tax

First of all, the Alternative Minimum Tax (AMT) is a specific tax some people are required to pay, based on income levels, in addition to normal income taxes.

Find out what's happening in Oaktonwith free, real-time updates from Patch.

There are changes this year to the Alternative Minimum Tax Code. The exemption amount has decreased to $33,750 for singles, $45,000 if married filing jointly (or with a qualified widow(er), $22,500 if married filing separately. To find out specific details on the AMT, go to: http://www.irs.gov/pub/irs-pdf/f6251.pdf

You should note Congress is considering changing the rules that would increase the AMT exemption amounts (listed above) and make it unnecessary to file form 625l with your taxes.

Earned Income Credit

You should know the EIC or earned income credit has increased slightly this year. Your child must qualify as a dependent and according to the stringent rules of the IRS.

  • One qualifying child will equal $3,050 in EIC
  • Two qualifying children will equal $5,036 in EIC
  • Three or more qualifying children will equal in $5,666

What if you do not have a qualifying child? If you qualify, you can take the $457 EIC automatically.

Additionally, the earned income level has increased you may be able to take the credit if you:

  • Have one qualifying child and earn less than $35,535 (if you file married/jointly, then $40,545)
  •  Have two qualifying children and earn less than $40,363 (if you file married/jointly, then: $45,373)
  •  Have three or more qualifying children and earn under $43,352 (or married/filing jointly, then $48,362)
  • Again, if you don't have a qualifying child, you may still be able to take the EIC. The amounts are $13,460 (or married/filing jointly $18,470)

For more information on this credit, visit:

http://www.irs.gov/pub/irs-pdf/p596.pdf

Credit for Advanced Earned Income Credit Payments:

According to IRS Publication 509, credit for advance earned income credit payments will not be available after Dec. 31. The skinny on that though is that employees can still claim the credit on their taxes.

For more detailed information, please visit this IRS link:  http://www.irs.gov/publications/p509/ar01.html

Qualified Hybrid Car Credit

If you're thinking about buying a hybrid car to take advantage of the Qualified Hybrid Tax Vehicles Credit, you're going to have to hurry because Dec. 31 is the last day your hybrid purchase would qualify.

Please remember that although a seller may claim their vehicle qualifies, you are still responsible for verifying that information. The IRS clearly states what is required right here: http://www.irs.gov/businesses/article/0,,id=175456,00.html

To see if the car you're interested in qualifies: http://www.irs.gov/businesses/article/0,,id=175456,00.html

Got all that? If not, don't worry too much about it, your professional tax preparer will have the scoop on all of the latest and greatest tax deductions, credits and changes in tax law available at their fingertips.

Some final things to remember, according to Jacquelyn Arnold of Jackson Hewitt Tax Preparation Services, "The most common things people forget to bring with them during tax time are their dependent's social security numbers, receipts for expenses and charitable contributions." Remembering these items the first time you walk into your appointment will save you time on the processing of your tax return — and hopefully save you time in receiving your tax refund.  

We’ve removed the ability to reply as we work to make improvements. Learn more here

The views expressed in this post are the author's own. Want to post on Patch?

More from Oakton