Current Issues in Income Tax

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Current Issues in Income Tax
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New for 2008

• Many changes affect the preparation of your 2008
  return
• Extended deadline for issue of brokerage
  statements
• Recent changes in Missouri and Illinois rules

3
Dependents

• Kiddie Tax now extends to age 24 for students
• Children who are under age 18,
• Children who are age 18 unless they provide over
  half of their own support based on earned income,
  and
• Children ages 19-23 who are full-time students
  unless they provide over half of their own
  support based on earned income.
• Custodial accounts vs 529 plans
• Education credits
• Doubled in core disaster areas
• Includes books, room and board

4
Nonbusiness Energy Property Credit

• The credit for up to 500 of home improvement
  costs has been extended through 12/31/09
• Not available in 2008

5
Alternative Minimum Tax

• Patched for 2008 (45000 to 69950)
• Still in limbo for 2009
• Some items trigger AMT

6
Real Estate

• First time homebuyer credit of 7500
• Property tax for non-itemizers
• The deduction for mortgage insurance premiums
  paid on a qualified residence has been extended
  through 12/31/10.

7
IRAs

• Qualified charitable distributions (QCDs) from
  IRAs
• Cashing out all your traditional IRAs may
  generate a deductible loss

8
Educators

• The 250 educator expense deduction was extended
  through 12/31/09.

9
Capital Gains and Losses

• 0 Capital Gain
• The 5 net long-term capital gain rate drops to
  0 to the extent taxpayers are in the 10 or 15
  tax brackets.
• Capital losses

10
Sales taxes

• The deduction for state and local sales taxes in
  lieu of state and local income taxes was extended
  through 12/31/09.

11
Stimulus

• Recovery Rebate Credit
• The rebate that was paid in 2008 will be
  reconciled on the 2008 tax return.
• Dependents on 2007 may now qualify for stimulus

12
Missouri and Illinois

• Illinois has many new forms, but little real
  changes
• Missouri made changes in 2007

13
New for 2009

• Gift tax exclusion is 13,000
• Estate tax law changes make estate planning
  necessary for many more taxpayers

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HR Block Tax and Business Services

• Formerly Vantive Partners
• Founded November 1 of 2007
• New business model
• Rebranded to better reflect our services

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HR Block Tax and Business Services

• Provide
• Tax Preparation
• Audit assistance and representation
• Forward-looking tax planning
• Professional Review