Stacy’s Tax Tips
The new American Opportunity Credit helps families pay for the first four years of college. It replaces the current hope credit and helps cover not only tuition but the cost of books as well. This credit is up to $2,500 per student and, of course, subject to income limitations and total education expenses paid. The lifetime learning credit still exists for post-secondary education.
Keep in mind that a child can only earn $1,900 in investment income and still be taxed at their rate. If they earn more, it is all taxed at the parent’s rate.
The first $2,400 of unemployment earned is tax free for 2009 and the rest is taxable.
Make sure that if you are over 59 that you ask you’re preparer about an additional IRA contribution. There is a catch up contribution of $1,000 allowing those over 59 to contribute $6,000 instead of $5,000 and an additional $1,000 to 401Ks as well.
Call me for all of your accounting and tax needs! If you have a topic of interest, call me and I will try to include it in my tax tips.
I can be reached at 718-318-8829 and my office is located on 438 Beach 129 Street, 2nd Floor.