The Federal Tax Credits Blog

Archive for October, 2008

Question: Can my wife buy my house from me and get an $8000 tax credit?

My wife has never bought a house, but I have and she lives in the house I bought before we got married. She is listed on the title of the house but not the home loan. Could she buy the house from me and get an $8000 tax credit?

Answer: Nope. LOL, don’t you think the governement is a bit smarter than that?!

Calendar

Deadline for calendar items is two weeks in advance of desired publication date. E-mail information on clubs, lectures, community and religious events, reunions and support groups to drock@pioneerlocal.com or fax to (847) 599-6902.

Kankakee First Time Homebuyers $8000 Tax Credit

Question: How long do you have to be attending college to get credit on your tax return?

Answer: You must be a full-time student–attending classes in at least 5 months out of the year.

City looking to hire up to 17 firefighters

The Norman Fire Department is seeking men and women for the upcoming Norman Fire Academy scheduled to begin June 1. Applications will be available Monday through Jan. 15.Qualified applicants must be at least 18 and have a minimum of 30 credit hours from an accredited college or university.

Learn About the New 2009 College Tax Credit

New Bedford company wins $570K tax incentive for expansion

The Massachusetts Life Sciences Center has awarded a $570,000 tax incentive to a New Bedford manufacturer, boosting the company’s plans to expand and hire more employees.

Real Estate Conditions 6 – Mortgage & First Time Home Buyer Dec08 Loss Mitigation Department

The 401k early withdrawal penalty
If you withdraw money from your 401k retirement plan before your reach the age of 59 and 1/2 years, you will have to pay a penalty on the taxable amount, which is known as 401k early withdrawal penalty. You will also have to pay income tax on the “early withdrawal” amount from your 401k. To calculate your 401k early withdrawal penalty, you need to understand two components of early withdrawal. The first one is how to calculate the federal and state tax that will be come due. The second is the tax penalty on early withdrawal, included in most plans. Below you will find the method for calculating your 401k penalty.

Step1 – Federal Tax Due: Determine what federal tax rate you are paying. Once you take the money out of the 401k it is considered income, as the withdrawal is from money that is pre-tax, and must be taxed. The federal income tax rate runs from roughly 15 percent to 35 percent for the majority of Americans. To find your tax bracket, check your previous tax returns and also make sure that your withdrawal does not propel you into a new tax bracket. For example, if you take out $30,000 from your plan, you will have to pay $6,000 as a penalty if your tax rate is 20%, assuming that the distribution is all income.

Step2 – State Tax Due: In this step, you will have to determine the state income tax bill on the 401k withdrawal. Check the state income tax you paid the previous year, as this amount of money should be accounted for as well. From the example above, if you state income tax rate is 5%; you will pay $1,500 to the state on the income of $30,000.

Step3 – Early Withdrawal Penalty: Add 10 % to the amount of the withdrawal you are making to get your final penalty. IRS rules generally states that you are charged 10% as an early withdrawal penalty, unless you qualify for some exception. This amount will be in addition to the taxes mentioned above. For instance, if you are taking $30,000 and are in a 20 percent tax bracket in a state with 5 percent income tax, your $30,000 withdrawal will net you less than $20,000. You lose $3000 for the penalty, $6000 for the federal income tax and $1500 for the state income tax.

Determine whether you qualify for an exemption from the penalty, as in certain instances, you can access your money early without paying the taxes.

Potential exceptions to early 401k withdrawal penalties

Potential exceptions to early withdrawal penalties from a Traditional IRA

The 401k early withdrawal should be seen as a last resort. The best option to save you from 401k withdrawal penalty is to inquire about the possibility of obtaining a 401k loan; such loans are not subject to tax and penalties. The good news is that you will not have to pay 401k early withdrawal penalties if you withdraw money when you leave your company, the same year you reach the age of 55 years or greater.

Jim Ellis Auto Dealerships to Sell Wheego Electric Cars

Jim Ellis Auto Dealerships will represent Wheego Electric Cars throughout the greater Atlanta, Georgia area. Jim Ellis offers the low-speed Wheego Whip now, and will offer the full-speed Wheego LiFe when it is available to customers in September. Atlanta customers can reserve a Wheego LiFe now.

Question: is it mandatory to fill out the other parts of the TurboTax application ie. tax/credits, deductions,?

questions about ira accounts and other questions not related to federal or state taxes etc. to people it doesn’t apply to have to be filled out?
Because those are a lot of extra questions for someone whose taxes are simple.

Answer: No. Only answer the questions that are related to your tax situation.
If you do not have an ira account- just skip the questions and other questions that are not related just skip them.
It is easy.

Get out of debt in 2010

In order to continue their quest for financial freedom — a resolution they originally set for themselves in 2007 — Douglass residents Delores and Steven Guthrie will attempt “to live like no one else” in 2010.

Ultimate Tax Deduction Solution to our Exploding Deficit