2009 Hybrid Vehicle Credits
The IRS posted 2009 & 2010 model year hybrid vehicle credits on their web site.  These credits are valuable in reducing income tax liability, however, be aware, they do not reduce AMT.  Click this link  to view the list on the IRS web site.

Mandatory Californa E-Pay For Individuals
Beginning January 1, 2009, individuals are required to remit payments electronically once they meet either of the following conditions:

• Make an estimated tax or extension payment greater than $20,000 for a taxable year beginning on or after January 1, 2009; or
• File an original return with a tax liability greater than $80,000 for a taxable year beginning on or after January 1, 2009.

After one of these conditions is met, all future payments, regardless of type, amount, or tax year must be remitted electronically. Electronic payment methods include electronic funds withdrawal (EFW), Web Pay, or credit card. This first payment to which these mandatory electronic payment requiement applies is the 2009 first quarter estimated payment due April 15, 2009.
 
Any taxpayer required to remit a payment electronically who makes a payment by other means is subject to a one percent penalty of the amount paid, unless the failure to pay electronically was for reasonable cause and not willful neglect.
 
Taxpayers whose tax thresholds fall below the mandatory e-pay amounts may request to discontinue making electronic payments. In March 2009, FTB will provide a waiver form for taxpayers to file.
 
On December 1, 2008 the Franchise Tax Board sent courtesy letters (see an example) to taxpayers who made an estimated tax payment in 2008 that were near or above the new mandatory e-pay threshold amount ($20,000). The letter informed these taxpayers of the law change, and that they may meet the requirement for mandatory e-pay in 2009.

Making a gift from your IRA
Some older taxpayers may benefit by taking advantage of a recently enacted law that extended the life of a popular provision that had expired. The law allows individuals age 70½ and older to make direct transfers of as much as $100,000 a year from an IRA to qualified charities without having to count those distributions as taxable income. What's more, the transfer counts toward the taxpayer's required minimum distribution. This provision has been extended through 2009. "Not all charities are eligible," the IRS said in a statement issued Tuesday. "For example, donor-advised funds and supporting organizations are not eligible recipients.

Charging your charitable contributions
If you want to make a big gift to your favorite charity to nail down a deduction for your 2008 return, but don't have the cash to do it now, consider charging your gift to a credit card. As long as you charge your gift this year, you can deduct it for this year. "Contributions are deductible in the year made," the IRS said. "Thus, donations charged to a credit card before the end of the year count for 2008. This is true even if the credit card bill isn't paid until next year. Also, checks count for 2008 as long as they are mailed this year."

Year-End Charitable Contributions
IRA owners age 70 1/2 or over can transfer up to $100,000 per year tax-free to an eligible charity, regardless of whether they itemize their deductions. To deduct monetary donations of any amount, the taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Contributions are deductible in the year made, so donations charged to a credit card before the end of the year count for 2008, as do checks as long as they are mailed this year. Get a receipt for ALL donations of property, including clothing and household items that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. It is very important that the documentation received from the charitable organization is received prior to the date you file your tax return and includes that amount of the donation and amount of goods and services received (if any) from the charitable organization in return. 

Possible Extension of the Home Buying Credit

On June 22, 2009, the USA Today reported that Congress is considering an extension of the first-time home-buyer credit that is other going to expire this fall. Some members in Congress are even proposing to raise the credit from $8,000 to $15,000 and apply it to anyone who buys a home.

There are several proposed bills in the House that would extend the credit, each using a different mechanism for doing so, however, as there is a lot of activity in this direction, it seems likely that some sort of extension to the credit will emerge in a bill that will eventually get signed into law.

According to the article, four separate proposals and ideas to continue to spur the housing market have emerged:

1. A Senate bill submitted by Sen. Johnny Isakson, R-Ga., and co-sponsored by Senate Banking Committee Chairman Chris Dodd, D-Conn., proposes raising the credit to $15,000 for any homebuyer with no income limitation. This bill was entered in May.

2. Rep. Kenny Marchant, R-Texas, last month submitted a House bill that would extend the current $8,000 credit for first-time homebuyers through June 2010 and would also provide a $3,000 tax credit to current homeowners who refinance.

3. Rep. Eddie Bernice Johnson, D-Texas, introduced a bill that would extend the $8,000 credit to 2010 and now include ALL homebuyers.

4. The Business Roundtable, a separate group composed of CEOs from large companies, earlier this month asked Congress to raise the credit to $15,000 and make it available to all homebuyers.

Levering & Hvasta, CPAs LLP offers the above information for general guidance purposes only.  Information provided on this web site should not be relied upon without consulting a competent tax or other relevant financial professional.  Please do not hesitate to contact us if you have any questions or would like to meet with us to dicuss your tax or financial planning matters.

©2009 Levering & Hvasta, CPAs LLP