Accountant and Financial Advisor Glover Davis is back as a guest journalist with timely tax planning tips & strategies for the 2008 tax filing year.
In my on-going effort to bring to your attention useful tax-saving information that will enable you to take full advantage of all deductions/credits which can help you increase your income tax refund or at least to minimize the amount of any balance you might owe; I present the following tax law changes/reminders that are applicable to the 2008 income tax filing season:
***Homeowners who had mortgage debt forgiveness/cancellation due to a foreclosure or restructuring of the mortgage on your principal residence during calendar year 2008 (and receive Form 1099-A from their mortgage lender), can have the cancelled debt excluded from gross income by having Form 982 prepared and filing it with your 2008 income tax return. Previously the amount of the cancelled debt was included in your gross and taxable income and would increase your income tax burden when you could afford it the least! This law was enacted late in 2008 and is available to you for the 2008 income tax season!
***A surviving spouse, who sells his/her principal residence within 2 (two) years of January 1, 2007 – after the death of his/her spouse, will qualify for a $500,000.00 capital gains exclusion rather than $250,000.00 as was the law previous to the 2008 income tax year!
· A First-time Home buyer Credit is available for primary residences purchased after April 8, 2008 and prior to July 1, 2009. To obtain this credit, you must file Schedule 5405 with your 2008 form 1040.
***A First-time Home buyer is anyone who did not own a principal residence during the 3-year period plus 1 day ending on the date that you purchased your new home or residence. Therefore, individuals, couples and etc. who owned a home at least 3 (three) years plus 1 day prior to – and who sold that previous primary residence at least 3 (three) years plus 1 day prior to purchasing a new principal residence during 2008 – will be considered a “First-time Home buyer” and is eligible for the credit on his/her/their 2008 income tax return! This is a very significant ruling and can yield real income tax savings for you!
Look for additional income tax tips and strategies during the income tax filing season!
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