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2010 Late Tax Filing: Key Tax Changes to Look for in 2010

2010 is already retreating from memory, dragging back to the bog they should never have left the tawdry trysts of the golfing Tiger and the Governor of Illinois’s oblong shock of hair.

We’re thankfully rid of Bieber fever too, and mama grizzlies have returned to their den. Which is not to say all of us are quite done with the year.

Take your 2010 tax return. If you have yet to file your 2010 Taxes, you’re right where you need to be to do so.

The tax professionals at Priortax are here to guide you. We will run the gamut of the year’s deductions and credits and make sure you fully benefit from those that apply to you.

Even If you are not due a refund, filing your 2010 taxes now will help alleviate the penalties and interest you owe the IRS. We will ensure that your tab is kept to a minimum.

Although 2010 saw the passing of the mammoth Health Care Bill most of its many stipulations do not directly affect individual taxpayers until 2013 when the Federal Insurance Contributions Act tax (FICA) is scheduled to go up for incomes that fall above specific thresholds.

There is one tax change that went in effect immediately following the signing of the bill on March 30th, 2010, and it does impact certain individual taxpayers. We’ll open our rundown of the year’s tax developments with it:

• Starting on March 30th, the Self-employed Health Insurance Deduction allows self-employed individuals to deduct premiums paid for health insurance covering the taxpayer, their spouse, and dependents, as well as payments for an adult child under the age of 27.
• The Alternative Minimum Tax (AMT) exemption increased for 2010. The new levels stand at $72,450 for married filing jointly, $36,225 for married filing separately, and $47,450 for single or head of household.
• Personal Exemptions and itemized deductions are no longer phased out. Income limits for personal and dependency exemptions as well as itemized deductions do not apply. Previously taxpayers with incomes above certain levels lost part or all of their itemized deductions.
• Income limits no longer apply to Roth IRA conversions from an other retirement plan. Half of the resulting income must be included as 2011 income and the other half as 2012 income. Otherwise, all of it must be included in 2010.
• Qualified charitable distribution is available to IRA owners age 70 1/2 and over. These taxpayers can directly transfer tax-free up to $100,000 from their IRA to eligible charities.
• The Adoption credit is expanded, with its maximum now set at $13,170 per child. A refundable credit, it is generally based upon qualified adoption expenses such adoption fees, court costs, and attorney fees.
• The First-Time Homebuyer credit is not available for those who purchased a home after April 30th, 2010 under most circumstances. However, taxpayers who entered into a written and binding contract to buy a home by that date, with the intent to buy the home before July 1st, and completed their purchase by the 1st of October may qualify.
• Those who received the First-time Homebuyer credit for a home bought in 2008 must generally begin to repay the credit on their 2010 return.
• You can claim a Casualty Loss deduction for the amount paid to repair damage to homes and appliances caused by corrosive drywall installed between 2001 and 2008.

Remember that this list is not exhaustive. For example, a number of tax benefits, such as the Increased Standard Deduction for real estate taxes, expired in 2010. Please ask your Priortax expert to confirm which credit or exclusion is no longer applicable to your financial situation.