To Receive Best Tax Refund, Jackson Hewitt® Reminds Taxpayers to Know Already Expired Tax Deductions
PARSIPPANY, N.J., Nov. 3, 2010 /PRNewswire/ -- The expiration of the tax cuts enacted by the Bush Administration have been the source of significant debate in the media and on Capitol Hill, but those cuts affect 2011 tax returns. For upcoming 2010 returns, Jackson Hewitt Tax Service® urges consumers to educate themselves on the deductions that have already expired this year – so they understand the implications for their own individual tax situations.
"Most of the current dialogue is about tax provisions set to expire at the end of 2010, which would then be in effect when filing a 2011 tax return in 2012," said Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. "But of more immediate concern are the key expired credits and deductions that will affect consumers when they file a 2010 return this coming year. Already changed are deductions related to education, state and local sales tax, as well as income thresholds for the Alternative Minimum Tax. Taxpayers need to know these in order to file returns with the highest refund potential."
Steber noted that potential additional changes by Congress remain an open question: "With so much still up in the air, there's no doubt that working with a knowledgeable tax preparer is critical. A preparer who has access to up-to-date information from the IRS will help ensure that a taxpayer has the right details in hand when he or she prepares to file a 2010 tax return."
Steber pointed to several deductions that, as of now, may no longer be claimed on a 2010 tax return:
- Tuition and Fees Deduction – The direct deduction of up to $4,000 in tuition and fees expenses is no longer permitted.
- Educator Expense Deduction – Teachers and aides who purchase classroom supplies with out-of-pocket expenses can no longer claim a direct deduction of up to $250 to cover these costs. However, these expenses are still allowed as miscellaneous itemized deductions.
- State and Local Sales Tax Deduction – The state and local general sales tax deduction can no longer be itemized. This will impact taxpayers in states with little to no income taxes and where sales taxes paid are larger than income taxes paid.
- Alternative Minimum Tax (AMT) Exemption – Changes in income exemption mean that more than 26 million* American families may be affected by the AMT when a filing 2010 tax return – up from just over 4 million families in 2009. The exemption amount has been increasing annually since the Bush tax cuts. Now, unless extended or otherwise changed for 2010, exemptions are set to drop back to the 1992 rates, which are: $45,000 for married filing jointly (from $70,950); $33,750 for single and head of household (from $46,700); and $22,500 for married filing separately (from $35,475).
- Alternative Minimum Tax (AMT) Credit Limits – Beyond the lower income exemption level, the stricter AMT provisions will also limit many common tax credits – effectively reducing a taxpayer's refund or increasing a balance due. Some of the credits affected by AMT changes include:
- Child and Dependent Care Credit
- Retirement Savers Contribution Credit
- Credit for Elderly and Disabled
- Education Credits
*http://finance.senate.gov/newsroom/ranking/release/?id=2740e3ad-39a6-4c14-88e8-79ee91ebc14f
About Jackson Hewitt Tax Service Inc.
Based in Parsippany, N.J., Jackson Hewitt Tax Service Inc. is an industry leader providing full service individual federal and state income tax preparation. The company had more than 6,400 company-owned and franchised offices, most being independently owned and operated, throughout the United States during the 2010 tax season. Jackson Hewitt Tax Service® also offers an online tax preparation product at www.jacksonhewittonline.com. For more information or to locate the Jackson Hewitt Tax Service office nearest to you, visit www.jacksonhewitt.com or call 1-800-234-1040. Jackson Hewitt can also be found on Twitter and Facebook.
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SOURCE Jackson Hewitt Tax Service Inc.
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