Third quarter estimated tax payments are due on September 15.
Energy efficiency tax credits are for homeowners to improve their house with energy efficient appliances, windows, and other energy saving upgrades.
Most of the improvements must be placed in service January 1, 2009 through December 31, 2010. Here is a summary of the energy efficient upgrades and the tax credit available. For specifications of each, see the Federal Tax Credits for Energy Efficiency.
Source: Federal Tax Credits for Energy Efficiency
What are the Cash for Clunkers tax rules? Do you have to pay federal income tax on the Cash for Clunkers program?
There seems to be a lot of confusion around the tax rules for the Cash for Clunkers program which ended this week. One of the tax rules currently being debated is whether or not you need to pay federal income tax on the value of the cash for clunkers program voucher.
Here is the federal income tax rule from the official Cash for Clunkers government website:
(h) Exclusion of Vouchers From Income
(1) FOR PURPOSES OF ALL FEDERAL AND STATE PROGRAMS- A voucher issued under this program or any payment made for such a voucher pursuant to subsection (a)(3) shall not be regarded as income and shall not be regarded as a resource for the month of receipt of the voucher and the following 12 months, for purposes of determining the eligibility of the recipient of the voucher (or the recipient’s spouse or other family or household members) for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal or State program.(2) FOR PURPOSES OF TAXATION- A voucher issued under the program or any payment made for such a voucher pursuant to subsection (a)(3) shall not be considered as gross income of the purchaser of a vehicle for purposes of the Internal Revenue Code of 1986.
So there’s your answer. The voucher is not subject to federal income tax.
For more information, including state tax information, see Cash for Clunkers Tax Rules and the Cash for Clunkers Business Tax Rules.
State sales tax holidays are here! If you’re lucky, your state will encourage you to shop on specific days this summer and fall to avoid paying sales tax. Sales tax holidays vary by state. Here is an overview of the dates and savings for each state:
Alabama
Connecticut
Georgia
Iowa
Louisiana
Mississippi
Missouri
New Mexico
North Carolina
Oklahoma
South Carolina
Tennessee
Texas
Vermont
Virginia
West Virginia
Source: Guide to State Sales-Tax Holidays 2009
The 2009 tax brackets are out. Don’t forget tax rates are marginal, so you’ll pay taxes at each rate until you reach your taxable income level.
For example, a single filer who has $25,000 of taxable income will pay 10% on the first $8,350 ($835) and 15% on the remaining $16,650 ($2,497.50). The total tax will be $3332.50, or an average tax rate of 13.3%.
| Tax Rate | Single | Married Filing Joint | Married Filing Separate | Head of Household |
|---|---|---|---|---|
| 10% | Up to $8,350 | Up to $16,700 | Up to $8,350 | Up to $11,950 |
| 15% | $8,351 – $33,950 | $16,701 – $67,900 | $8,351 – $33,950 | $11,951 – $45,500 |
| 25% | $33,951 – $82,250 | $67,901 – $137,050 | $33,951 – $68,525 | $45,501 – $117,450 |
| 28% | $82,251 – $171,550 | $137,051 – $208,850 | $68,526 – $104,425 | $117,451 – $190,200 |
| 33% | $171,551 – $372,950 | $208,851 – $372,950 | $104,426 – $186,475 | $190,201 – $372,950 |
| 35% | Over $372,950 | Over $372,950 | Over $186,475 | Over $372,950 |
It’s important to note that the Make Working Pay Tax Credit will reduce some of the the tax due in the 10% tax bracket.
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