Tax Tidbits

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Get ready!  Big changes to the Medicare tax are coming in 2013!  Starting that year, higher income taxpayers will be charged an additional .9% Medicare tax, and the tax will be expanded to cover unearned investment income.  More at:  http://money.cnn.com/2010/03/22/news/economy/medicare_tax_increase/index.htm

Canceled debts are generally taxable, but the good news is that there are exclusions.  If you recently had a credit card debt canceled or reduced, or perhaps a mortgage, you may be entitled to claim the bankruptcy, insolvency, or principal residence exclusions.  For details, see:   http://www.irs.gov/app/vita/globalmedia/p4681.pdf  

Wondering when your refund will be coming? You can check the status online at:   http://www.irs.gov/individuals/article/0,,id=96596,00.html

Oops!  Did you make a mistake on your return?  To correct an error, file form 1040X.  Here's a link to the form:  http://www.irs.gov/pub/irs-pdf/f1040x.pdf.

Did you know you can pay your taxes by debit or credit card?  For details on your payment options, see:  http://www.irs.gov/efile/article/0,,id=119097,00.html. 

Here are some last-minute tips for those procrastinators out there who have not yet filed their tax returns:  https://mailapp01.register.com/cde9ca86/gds/popout.html 

Don't forget that your duty to file a tax return is separate from your obligation to pay the tax owed.  Even if you don't have the $ now to pay the IRS all that you owe, be sure to file a timely tax return or you could face additional penalties.  You can obtain an installment agreement to pay your taxes out over time by filing Form 9465 available at:  http://www.irs.gov/pub/irs-pdf/f9465.pdf.

If you make a contribution to a qualified charity for Haiti earthquake relief before March 1st, you can deduct the contribution on your 2009 Schedule A rather than waiting until 2010.  See:   http://www.irs.gov/newsroom/article/0,,id=218679,00.html.

Don't forget to claim the new "Making Work Pay" credit by filing a Schedule M and reporting your credit on Line 63 of your Form 1040.  You may be entitled to a tax credit up to $800!  For details, see:  http://www.irs.gov/newsroom/article/0,,id=218614,00.html.  You can access the Schedule M at:  http://www.irs.gov/pub/irs-pdf/f1040sm.pdf.

Own a home but don't itemize?  You can still deduct up to $500 of your real estate taxes in addition to your standard deduction.  Check box 40b on your Form 1040 and attach Schedule L.  You can access the Schedule L at:  http://www.irs.gov/pub/irs-pdf/f1040sl.pdf.

The new standard mileage rate for business miles driven in 2010 is 50 cents per mile (down from 55 cents per mile in 2009).

To subscribe to my quarterly newsletter full of tax tips, send an email with "Newsletter" in the subject line to Diane@dianeobrienkelly.com.

All content on this website copyright Diane O'Brien Kelly.