If you’re like most Americans, filing your income tax can be a daunting task. Just being able to complete the income tax form correctly can be considered a victory. But before filing your income tax return, there are a few good tax tips regarding the tax breaks that were renewed and can be claimed on 2010 returns.

• State and local general sales tax deduction, primarily benefiting people living in areas without state and local income taxes. Claim on Schedule A, Line 5.
• Higher education tuition and fees deduction benefiting parents and students. Claim on Form 8917.
• Educator expense deduction for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250, Claim on Form 1040, Line 23 or Form 1040A Line 16.
• District of Columbia first-time homebuyer credit. Claim on Form 8859

For further information about these changes and for other tips on taxes, visit the IRS website.

source: irs.gov

Its a rare occurrence when Democrats and Republicans agree on an issue. But on the issue of a particular Obama health care tax requirement, both sides agree that it could hurt businesses.

As reported by CBS News, Republicans in the Senate want to repeal a part of President Obama’s health care reforms they say place undue burden on businesses — and so do, apparently, Democrats.

Senate Democrats, led by Florida Sen. Bill Nelson, introduced on Thursday a measure to roll back a provision of the health care reforms that requires businesses to fill out more tax forms, the Hill reports.

Republicans had already introduced a plan to repeal the provision, and the measure was gaining support — including the support of one Democrat, moderate Sen. Blanche Lincoln of Arkansas.

The provision in question requires businesses to fill out a 1099 form with the IRS once the goods it purchases from another business in the span of a year exceed $600. It does not create a new tax, but simply requiring businesses to fill out the paperwork would generate approximately $17 billion over 10 years, the nonpartisan Congressional Budge Office estimates.

Senate Minority Leader Mitch McConnell said this week the provision would create “an enormous amount of paperwork and complexity” for businesses, the Hill reports. Republicans are pointing to the new requirement as an example of how the president’s policies hurt business.

Given that repealing the provision would leave the government $17 billion short, the Republican proposal would cut billions of dollars in preventive health care services, according to the Hill.

By contrast, the Democratic proposal would scale back the filing requirement — only requiring businesses with more than 25 employees to fill out a 1099 after purchasing $5,000 worth of goods. To make up for the lost revenue, the Democratic measure would reportedly eliminate a tax break for large oil companies.

The Senate is slated to take a procedural vote on the Republican bill on Sept. 14, according to the Hill, and subsequently take up the Democratic alternative as an amendment.

Both Democrats and Republicans in the House also want to repeal the provision, but they failed to pass a bill to do so last week, because of differences of opinion over how to make up for the $17 billion lost.

Meanwhile, some states continue to challenge more significant portions of the health care reforms, such as the individual mandate — the requirement that all Americans acquire health care. A district judge this week denied the White House’s request to dismiss a lawsuit against the requirement. The Virginia General Assembly passed legislation this year exempting state residents from the federal coverage mandate, and the Virginia Attorney General filed suit against the federal law. Several other state attorneys general have filed a separate lawsuit challenging the federal law.

Former Vermont Gov. Howard Dean, a longtime liberal advocate for health care reform, predicted on MSNBC today that the individual mandate would be taken off the law books by 2014, when most of the reforms will be in place.

“Academically you want a mandate. The American people aren’t going to put up with a mandate,” Dean said. “I made this prediction before and I’m going to make it again: by the time this thing goes into effect in 2014, I think the mandate will be gone either through the courts or because it’s unpopular. You don’t need it.”

Even in the rare instance when both parties agree on a measure, they fail in passing it into law.

For once, can the House and Senate put politics aside and do the right thing?

source: cbs.com

By a vote of 241-181, the House on Wednesday sent the Senate a bill (HR 4213) to extend through 2010 a $31 billion package of temporary tax credits and other fiscal incentives that benefit a multitude of U.S. businesses, farms, units of government, schools, charities, individuals, nonprofit organizations, religious institutions and other recipients.

The bill uses two measures to pay for itself. One would tax the earnings of hedge-fund managers and certain investment partners as ordinary income rather than capital gains. The other would increase Treasury receipts by cracking down on wealthy Americans who use secret overseas bank accounts to evade taxes.

• A sales tax deduction that mainly benefits people who live in the nine states without a state income tax. The states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington and Wyoming. Cost: $1.8 billion.
• An additional standard deduction for state and local property taxes for taxpayers who don’t itemize their deductions. Cost: $1.5 billion
• A deduction of up to $4,000 for college tuition and related expenses. Cost: $1.5 billion.
• A deduction of up to $250 for teachers who spend their own money for books and other classroom supplies. Cost: $228 million.
• A credit that helps businesses finance research and development. Cost: $7 billion.
• Accelerated depreciation for improvements made to leased restaurant and retail property. Cost: $5.4 billion.
• Additional depreciation allowance for businesses that suffer damage from a federally-declared disaster. Cost: $1.4 billion.

Do you know how your state member of Congress voted on this issue of tax break extensions in 2010? Do you know the true tax facts about these bills?

You should!

Source: corsicanadailysun.com, seattletimes.nwsource.com