The Tax Lady Mobile Service

• First-time homebuyers can claim a refundable tax credit of up to $7,500($3,750 if married filing separately) for homes purchased after April 8, 2008, andbefore July 1, 2009. Can elect to treat a 2009 purchase as a 2008 purchase andclaim the credit in 2008.
• Credit is phased out ratably over a$20,000 range for taxpayers with AGIover $75,000 ($150,000 if married filing jointly).
• Functions as a 15-year interest-freeloan, with 1/15th of credit recapturedannually beginning 2 years after year ofpurchase.
• Credit will be claimed on new Form 5405

• For sales after 2007, the maximum exclusion on the sale of a main home by an unmarried surviving spouse is $500,000 if:

• The sale occurs no later than 2 years after the date of the other spouse’s death, The ownership and use requirements for joint filers were met immediately before the date of such death, and

• During the 2-year period ending on the date of such death, there was no sale or exchange of a main home by either spouse which qualified for the exclusion.

• Individuals can elect to postpone the running of the 5-year test period for ownership and use for up to 10 years starting in 2008 while the individual or his or her spouse is serving outside the United States in the Peace Corps.

• For sales and exchanges after June 17, 2008, members of the intelligence community that elect to postpone the running of the 5-year test period no longer are required to move to a duty station outside the United States.

• New 50% additional first-year special depreciation allowance applies to most new property purchased and placed in service after 2007.

• To be eligible, the property must be property with a recovery period of 20 years or less, off-the-shelf computer software, qualified leasehold property, or water utility property. The special allowance does not apply if the ADS method is required. The taxpayer may elect out for any class of property.

• The allowance is figured after the section 179 deduction and before regular depreciation. If the special allowance applies, the limit on depreciation and the section 179 deduction for automobiles is increased by $8,000.

The recovery rebate credit is a one-time benefit for people who didn't receive the full economic stimulus payment last year and whose circumstances may have changed, making them eligible now for some or all of the unpaid portion.

Generally, a credit adds to the amount of your tax refund or lowers the amount of taxes owed. Therefore, the amount you receive for the recovery rebate credit will be included as part of your refund, as shown on your tax return.

• For tax years beginning in 2008, taxpayers can claim a refundable credit figured in the same manner as the economic stimulus payment, except that the amounts are based on tax year 2008 instead of tax year 2007.

• The amount of the credit is reduced by any economic stimulus payment received in 2008. If the credit is less than the payment received, the difference does not have to be repaid.