Dear Client,   The State of Ohio has mandated electronic tax filing for the coming year. Our office is ready to make this transition but we may need some additional information from you. When providing us with your 2009 tax documents, please include the following information for all members of your household: names (as they appear on social security cards), social security numbers, and birthdates. If you would like to have any possible refund direct deposited, please also provide either avoided check or the account number and routing number for the account where you would like the refund deposited.   The biggest change for you will be that you won't receive paper to file with the IRS or Ohio. Instead you will have one form which represents your electronic signature to the government. You will still be receiving paper tax returns to file with the various city agencies. The Form 8879, which grants us permission to e-file your return, should be signed and returned to us via mail, drop-off, email, or fax as soon as possible after you receive it so that your return can be filed timely.   ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~                                     2009 Tax Planning and Savings Tips   In addition, we would like you to be aware of some opportunities or benefits from recent legislation that will assist you in tax planning.   Residential Energy Property Credit -  Some of the home improvements that may qualify include: insulation, energy efficient exterior windows & skylights, and energy-efficient heating & air conditioning systems. This credit can be as much as $1,500 for years 2009 and 2010 and is for 30% of the cost of qualifying items.   First-time Homebuyer Credit - For purchases of a principal residence with a closing date after December 31, 2008 and before December 1, 2009. The credit is equal to 10% of the purchase price up to $8,000 ($4,000 for married filing separately). This credit is not subject to repayment if the home remains the principal residence of the taxpayer for 36 months. The taxpayer is considered a first-time homebuyer if they have not owned a home for 3 years prior to the closing date of the new home.    New sales tax deduction for vehicle purchases - There is a new deduction for state and local sales taxes paid on the purchase of a new car, light truck, motor home or motorcycle after February 16, 2009 and before January 1, 2010. This deduction is generally available whether or not you itemize your deductions. The deduction begins to phase out at modified adjusted gross income over $125,000 ($250,000 married filing jointly).   Education Credit - The American Opportunity Credit is for higher education costs and modifies the Hope Credit for years 2009 & 2010. It is now for the first 4 years of higher education. The credit can be up to $2,500 and up to $1,000 may be a refundable tax credit even if there is no tax paid. Also, the cost of books and computers are now qualified expenses for this credit.      529 Education Plans - Computer technology & equipment and internet access are now qualified expenses for distributions from 529 education plans.   Tax break for the unemployed - For 2009 an individual does not have to pay tax on up to $2,400 in unemployment benefits received in 2009.   $250 Economic Recovery Payment - One-time payment received by retirees, disabled individuals, SSI recipients, disabled veterans, and railroad retirees. This payment does not come from the IRS but instead, from the Social Security Administration, Veteran Affairs, etc. This payment will affect your net tax liability. Please include a note in your tax documents if you received this payment.   Retirement Income - There are no Required Minimum Distributions (RMD) from retirement plans for 2009. In addition, those turning 70 1/2 in 2009 are not required to take a distribution by April 1, 2010.   If you have any questions about the e-file process or any of the information above, please feel free to call us. We look forward to seeing you in the new year.     Sincerely,   Kuhns & Associates   Christopher H. Kuhns, CPA Ronald M. Pribula, CPA Colleen M. Smith, CPA Linda Reinhardt, CPA, EA