Thoughts lead on to purposes; purposes go forth in action; actions form habits; habits decide character; and character fixes our destiny.
– Tyron Edwards
How was your long weekend? Hey–whatever your opinion about labor unions, I think we all appreciate an extra “day off” now and then (though, as with many business owners, my “day off” wasn’t exactly just burgers and the pool…working hard on getting ready for tax season around here)!
Yes, as you may have heard, “Labor Day” originated during the time of 7-day workweeks of 12-hour days, in the late 1800’s, as our country was in the throes of the Industrial Revolution. Times have certainly changed since then–and our economy is no longer driven by the manufacturing jobs of the past.
Now, it’s about *knowledge*…and that’s why I take the time each week to inform YOU about the “real world” steps you should be taking with your family’s finances, and how to be prepared for any circumstance. Including the changing tax law…
In this week’s Personal Strategy Note, I’m running down a list of some upcoming tax breaks which are set to expire THIS year. Some of them may end up getting extended into next year…but if you don’t act on them, then you’ll miss your chance to take advantage THIS year.
And, of course, some of them go away forever on December 31…
“Real World” Personal Strategy
Tax Deductions That Will Expire
As with anything like this, my staff and I are here to assist you in taking advantage of them. Call us if you have any questions.
Individual/Family Deductions Going Away
• The $4,000 deduction for “qualified tuition and related expenses”
• The $100,000 exemption for IRA distributions paid by the trustee directly to a qualified charity
• Increased exemptions for calculating the “alternative minimum tax”-able (AMT) income — this one’s a killer
• The deduction for sales tax you pay to buy a new car or truck
• The “First-time Homebuyer” tax credit (this one actually expires November 30, although it may be extended)
• Deductions for state and local sales taxes (as opposed to income taxes)
• Special deductions for state and local property taxes for clients who don’t otherwise itemize
For Business Owners
• The expanded “first-year expensing” dollar limit of $250,000 (which drops to $125,000 in 2010)
• Expanded first-year depreciation benefits for business vehicles
• The 50% “bonus depreciation” for new business equipment
• Accelerated depreciation benefits for certain tangible assets (including “qualified leasehold property,” restaurant property, retail space improvement property, and “qualified machinery and equipment” used in farming businesses)
• Special credits for “COBRA” continuation subsidies for laid-off employees
I hope this helps!