Of Deductions and Refunds
New Deductions
When you buy a new car, light truck, motorcycle or motor home between February 16th this year and January 1st 2010, you are entitled to a special sales tax deduction as part of the economic stimulus package signed into law by President Obama. This law also provides for the deduction of other taxes and fees paid in states that do not impose any sales tax.
This deduction is available to you regardless of whether you itemize your deductions on Schedule A. You may take the deduction upon filing your tax returns for the year of taxation 2009 next year.
However, there are certain limits that must be observed. Firstly, the deduction is applicable for the tax paid on up to $49,500 of the purchase price of the vehicle. Secondly, the deduction would not be available for the more well to do taxpayers. If you make a joint filing of your income tax on a modified adjusted gross income of between $250,000 and $260,000 or if you make a separate filing on a modified adjusted gross income of between $125,000 and $135,000, this deduction is phased out for you.
For further details, refer to the IRS website, www.irs.gov.
Surprise Refund
Have you received an IRS refund before? Many people have. But not many have received a refund of more than $100,000 in a single check.
Laura Schultz, a house cleaner in Denver received an extraordinary surprise in her mail recently – a check from the IRS for $122,783.51. Her house cleaning salary from Sunshine Maids in no way puts her in an income bracket to receive a refund check of such a high amount, but yet the check was bona fide and real.
It was an obvious mistake so Laura did the right thing. She called the IRS to tell them about the oversight. The IRS told her to void the check. Laura did what she was told and voided the check. After taking the right action, Schultz said she felt good about it.
What would have happened if she had kept the mistakenly-issued check? An IRS official said that if she were caught, it would result in interest charges over and above having to repay the IRS the full amount of the check.
So Schultz ended up back in square one, owing the IRS $80 in taxes on her income.
She paid her dues.
Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.
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