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Time To See Your Jolly Old Accountant

February 17, 2011

It is tax time and that means the filing season is upon us. We generally say there are two types of tax filers: those who file their returns right after they receive their W-2s, and those who toss their tax documents into a drawer, quietly hoping that a jolly old accountant will slide down the chimney on the night before Tax Day and complete their 1040s. If you fall into the second group, you have even more reason to procrastinate this year. The deadline for filing your tax return is April 18 – three days later than usual because Emancipation Day, a holiday in Washington, D.C., will be observed on April 15. In addition the IRS announced earlier this year that it wouldn’t process returns from taxpayers who claimed itemized deductions until mid-February. The IRS said it needed time to program its systems to accommodate several tax breaks included in the tax compromise bill signed into law late last year. Here are some money-saving tax breaks that could give you the nudge you needed to get started:

  • Adoption Tax Credit. The health care reform act increased the maximum adoption credit to $13,170. The tax credit is refundable, so if the amount of the credit exceeds your tax bill, you’ll receive a check for the balance.
  • Deduction for corrosive drywall damage. Last year, the IRS issued a special ruling that allows taxpayers to deduct the cost of repairing the damage to their homes or appliances as a casualty loss.
  • You installed energy-efficient windows or doors, or bought a new furnace or air conditioner. If you made your home more energy-efficient last year, you may be eligible for a tax credit for up to 30% off the cost, up to a maximum of $1,500. A tax credit is a dollar-for dollar reduction in your tax bill, making a credit more valuable than a deduction.
  • You bought an energy-efficient vehicle. Some taxpayers who purchased hybrid cars in 2010 may be eligible for a tax credit up to $2,200. However, the credit phases out after the manufacturer has sold 60,000 vehicles.

At GAI (www.gunwel.com) we love tax season as we enjoy the 3 months of meeting with our clients and helping them file their tax returns. It also gives us a chance to catch up on their adventures during the year and possibly help with any other financial scenarios they may have need of help with. Call us at 212-979-6830 or stop by and see us. We are open Monday thru Friday from 8am-8pm and Saturdays from 8am-5pm. See you soon!

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