Guest post by Rebecca Still. Normally Rebecca Still writes our monthly Business Tax Tips post. But this is a special report about year end changes by the IRS that will benefit you on your personal taxes.

Tax year 2008 is quickly nearing an end and the IRS has been busy as usual making tax law changes. Check out these new or re-instated tax credits and deductions.  You’ll have to act quickly though as December 31st is the deadline for most of the changes.

First-Time Homebuyers Tax Credit (Loan)
First-time homebuyers should begin planning now to take advantage of a new tax credit (the IRS calls it a credit, but in reality it is an interest-free loan) available for a limited time.  The credit applies to a primary home purchased between April 9, 2008 and June 30, 2009.  Normally, this tax credit must be paid back in equal payments over 15 years or upon sale of the home.  The credit is 10 percent of the purchase price with a maximum available credit of $7,500 for either a single taxpayer or married couple filing jointly.  First-time homebuyers are those who have not owned a home in three years prior to a purchase.

Real Estate Tax Deduction
There is an additional standard deduction for those who don’t itemize their deductions, but pay real estate taxes.  The additional deduction amount is equal to the amount of real estate taxes paid up to $500 for single filers or $1,000 for joint filers.  This deduction is available for the 2008 and 2009 tax years and increases your standard deduction.

Tuition and Fees Deduction
You may be able to deduct qualified tuition and required enrollment fees up to $4,000 that you pay for yourself, your spouse or a dependent.  You do not have to itemize to take this deduction.  However, a taxpayer cannot take both the tuition and fees deduction and education credits (Hope & Lifetime Learning credits) for the same student in the same year.  Income limits and other special rules apply.  To determine whether your expenses are qualified, refer to IRS publication 970, Tax Benefits for Education, at www.irs.gov. 

Educator’s Out of Pocket Expense Deduction
The educator expense deduction continues for 2008 and allows teachers to deduct the cost of books, supplies, equipment and software used in the classroom.  Eligible educators include those who work at least 900 hours during a school year as a teacher, instructor, counselor, principal, or aide in a public or private elementary or secondary school.  Worth up to $250, the educator expense deduction is available whether or not the educator itemized deductions on Schedule A.

Rebecca Still is an Accountant and Tax Preparer from Bolivar, Missouri. Rebecca has been in the accounting field for over 20 years. Rebecca and her husband also own an alternative health business; Still 4 Him, Inc. and operate a not-for-profit ministry to persons with developmental disabilities; First Serve Opportunities. Together they have four children and have been married for 19 years. You can reach Rebecca at (417)326-7845.