Be Aware of the New Tax Laws For 2009

Each year, the IRS releases changes in the US Federal income tax laws. Much hasn't changed for the past years but the recession during the last quarter of 2008 has been a great deal of influence to the new changes in tax laws. Tough economic conditions such as a recession mean that the taxpayer should pay special attention to those changes because this change may greatly affect your finances. Now let's take a look at those new tax laws for 2009;

Lower-income capital gains tax removed

It's essentially a tax break. Single taxpayers with a taxable income under $32,000 and married taxpayers with a combined income under $65,000 used to pay off 5% on those gains. That percentage has been reduced to 0% for the 2008 tax year. You can also benefit from this change in law business wise. Found in box 2a of form 1099-DIV, this change in law allows you to avoid paying capital gains taxes in the event you sold off capital assets like real estate, stocks or bonds for a profit off the price in 2008.

Tax credit for first-time home buyers

There are a couple of new laws that can benefit first-time home buyers. Firstly, if you decided to buy a home between April 9, 2008 and June 30, 2009, you can take a staggering $7,500 tax credit. This can help anyone immensely because not only would you gain a large sum, but this would automatically reduce your total tax payments.

The second law concerns private mortgage insurance (PMI). If you both took out the first mortgage later than January 1, 2007, and put less than 20% down on the house, you are very likely to pay PMI. This payment, however, will be deducted in full for the 2008 tax year. This means you will get all of it back.

Recovery rebate credit

Some people were not able to benefit from the economic stimulus payments last summer by then-president Bush. If you were one of these people, you may still be able to avail of it. If you want to find out if you are still eligible, you would need to use the Recovery Rebate credit Calculator at website of the IRS.

Increased penalty for late tax filing

While the above mentioned law changes are beneficial to the taxpayer, this one does the opposite. In this scenario, procrastination pays. The penalty for filing your return more than 60 days after the deadline has increased to either 100% of the unpaid tax or $135, whichever is smaller. Do not waste money

These are some of the important laws. For a full listing of the new tax laws for 2009, log on to the IRS website. Knowing the tax laws and actually abiding by them are very important not because the IRS always has a way of finding out your little tax evading schemes. Though this is true, the reason tax laws should be followed is because disobedience can cost you a fortune. Your finances have already been hurt by the current economic crisis, don't let ignorance of the new tax laws hurt you more. Know them. Take advantage of the laws that can benefit you, as well as avoid those that can do otherwise.