Maco & Associates
News You Can Use
January 2010

In This Issue
First-Time Homebuyer Update
Roth IRA Conversions
Appliance Credit Update
Sales Tax Exemption on New Cards
Charitable Contributions
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You should receive your preferential pre-scheduled tax appointment in the mail soon (look for our postcard), but if you need to change your appointment date/time, please contact us!  You can call or email:


And just a reminder that tax returns can't be filed until January 15th!
2010 Tax Credits, Changes, and Updates

Here's the latest edition of Maco & Associates' newsletter, News You Can Use, which brings tax issues to your attention. Today, we're highlighting tax credits, changes, and updates that you should be aware of as April 15th approaches.
First-Time Homebuyer Update...

First-Time Homebuyer Tax CreditThe first-time homebuyer credit is still available with a maximum credit of $8,000 for home purchases closed before June 30, 2010. Previous home owners who purchase a replacement primary residence are eligible for a credit up to $6,500. As of November 6, 2009, the credit must be requested via the new version of Form 5405. If you elect to file this credit on your 2009 return, you must file a paper return and cannot file electronically!

For more information on the benefits of this credit, please visit our blog. There's also more information on

Roth Conversions in 2010...

Year 2010 may bring many great things, financially speaking, for your IRA account. In 2010, everyone will be allowed to convert his/her IRA account to a Roth IRA. In a traditional IRA, your investment can grow and taxes are deferred until the money is withdrawn in retirement. If you decide to convert to a Roth IRA, you must pay taxes at the time of conversion on any investment you made pre-tax. Subsequent contributions are taxed at the time of investment, so you don't have to pay any additional taxes at the time of your retirement.

Roth IRAThe difference in 2010 is that there is no longer an income limit cap for a Roth conversion. Previously, income was capped at $100,000, eliminating the option to convert from a traditional IRA to a Roth for many taxpayers. Currently, this cap has been "permanently removed" (as permanent as any tax code change is)! Taxes must be paid on the conversion, but you may spread it out over two years to defer the tax hit (2011 and 2012); or 100% of the conversion may be recognized for taxes in 2010. The benefit comes in retirement when you can withdraw your investment and growth tax-free.

This is a potentially big decision for many of our clients. To help determine if you'll benefit from the conversion, try this Roth vs. Traditional IRA Calculator.

For more information, check out this article.

Appliance Credit Update...

New windows? New water heater? New Roof?Energy Star Insulation? If you purchased any of these items in 2009 or plan to in 2010, let's hope they're energy efficient! If they were, you may be eligible for a tax credit of 30%
(up to $1,500). Check out which household appliances qualify.

If you qualify, submit Form 5695 with your taxes before April 15, 2010.  Save the receipt and Manufacturer's Certificate Statement for your records.


To read more about what is eligible and to estimate your savings, see our blog article about the credit.

Sales Tax Exemption on New Car Purchases...

 Did you purchase a car this year? New Car Tax CreditBetween
 February 16, 2009 and
January 1, 2010? You
 could be eligible for a tax break in April. The tax
 deduction is good for state, local, and excise
 taxes for up to $49,500 of the purchase price
 on the vehicle. There is an income phase-out for this deduction, and it is available whether you itemize or not. Click here for more information.

Charitable Contributions...

Making a charitable contribution keeps getting more and more difficult, from a tax perspective that is! To receive a tax deduction on such contributions, several requirements must be met:

  • Itemize deductions on your tax return (1040) on Schedule A.
  • The donation must be made to a qualified organization. Click here to find one.
  • Maintain a record of the donation -- either a bank record or statement from the donee.
  • The fair market value of the donation may be deducted minus any benefits received (products, meals, etc). Click here to find the fair market value of a donation.
  • DonateIf your donation exceeds $500, you must also fill out Form 8283 with your tax return.
So, what you have to remember to receive a deduction is: 1) give to a qualified organization, 2) itemize on your tax return, and 3) get a receipt or proof of your donation and value!
As always, we're here year-round to help you make sense of the numbers. Give us a call at 610-489-7215 or send us an email any time! We look forward to hearing from you.
- Maco & Associates