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Did you know there’s an adoption credit available to families who adopt an eligible child during the current tax year? Here’s some great in formation directly from the IRS about the adoption credit:

• Generally, if you’re married, you must file a joint return to take the adoption credit or exclusion. If your filing status is married filing separately, you can take the credit or exclusion only if you meet special requirements. Check our irs.gov or ask your local tax preparer for details.
• You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child (including a child with special needs). The adoption credit is an amount subtracted from your tax liability.
• Qualifying expenses include reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging while away from home), and other expenses directly related to and for which the principal purpose is the legal adoption of an eligible child.
• An eligible child must be under 18 years old, or be physically or mentally incapable of caring for himself or herself.
• The adoption credit or exclusion cannot be taken for a child who is not a United States citizen or resident unless the adoption becomes final.
• Under the dollar limit the amount of your adoption credit or exclusion is limited to the dollar limit for that year for each effort to adopt an eligible child. If you can take both a credit and an exclusion, this dollar amount applies separately to each.

Read the rest over at irs.gov.

If you’re self-employed, chances are you dread tax time. Many self-employed taxpayers are responsible for paying quarterly taxes. Yes, that means they pay taxes four times a year! If you’re one of these poor souls, here are some tips to help make tax time a little less… well, taxing.

Set aside a workspace. If you’re using your basement or spare bedroom exclusively for business purposes, you can deduct that percentage of your home on your federal taxes. Just be sure that your workspace is exclusively for business purposes. A good way to measure this is to imagine if someone else entered your home and stepped into your office… would they easily be able to tell that this was a business area? Mortgage or rent payments and utilities can be divided and deducted the same way. And if you’re using a cell phone exclusively for business purposes, you can take that as a business expense, too.

Track your business expenses. Your mortgage/rent percentage and utilities percentage (for those who work at home) aren’t the only things you can write off if you’re self-employed. If you’re like many self-employed people, it’s sometimes hard to make a distinction between your personal life and your business. But it’s important to keep all receipts for business expenses you incur throughout the year. This includes any business travel and related expenses like meals, gas, car rentals, and hotel rooms if you’re traveling to and from client locations, conventions, or other events vital to the success of your business.

Don’t forget retirement. Being self-employed can be great: you’re your own boss, and you set your own hours. But it also means that there’s no day job to fall back on during tough times. Set up a personal, self-employed retirement plan now and start saving for an uncertain future. Money you put away reduces your taxable income. Going forward, money in the back allows you to take charge of your financial future in the same way you’ve taken charge of your business.

Health insurance premiums are deductible. If you’re self-employed and pay your own personal insurance premiums, they’re 100% tax deductible.  Watch your healthcare expenses, as well. If healthcare expenses account for more than 7.5% of your adjusted gross income, you can add these expenses under your list of itemized deductions. So keep all those receipts!

Review your accounts. Re-examine every purchase you’ve make in 2009 to ensure that you’ve taken all the business tax deductions that you’re eligible for. Remember, the IRS isn’t going to help you go through your accounts to look for deductions! It’s up to you to give your accounts a final review before submitting your tax return. If you feel you need help, contact your local tax professional.

As the year winds to a close, singles may want to start planning for more than where they’ll spend their next New Year’s bash. It’s commonly believed that all the tax credits go to married folks, but there are some tax tips and credits particular to singles that you should be aware of if you plan to continue your swinging singles life into the New Year.

1)      Check your status. If you’re a single parent, you may qualify for head-of-household status. This will give you much better tax rates than filing single. Sometimes even a married person with a dependent child can qualify for head-of-household rates, which beat the rates for those who are married-filing-separately. Not sure if you qualify? If you need help, don’t be afraid to visit a qualified tax preparer or tax professional to find out.

2)      Check your adjustments. Sometimes singles think that because they don’t itemize their tax return that they can’t take deductions. It turns out that there are certain deductions that are allowed whether or not you itemize your tax return. These include IRS and certain pension contributions, moving expenses, medical savings accounts, and student loan interest. If you’re self-employed, you can also take a health insurance deduction and a deduction for half of the self-employment taxes you pay.

3)      Take the exemption you’re owed! One of the biggest mistakes that single filers make is not taking a tax exemption for themselves on their W-4. Even if you’re single and have no children, you can still take an exemption for yourself. If you don’t, your employer will hold MORE taxes than you actually owe from each paycheck.  Sure, that means you have a great refund coming in April. But do you really want to give the government an interest-free loan until then?

4)      Job expenses may be deductible. Let’s face it, it’s rough out there, and looking for work – especially if you’re single – can feel like a full-time job. The good news is that many job-seeking expenses are tax deductible, including travel and transit expenses, employment agency fees, phone calls, and any money you spent for the creation, typing, printing, and mailing copies of your resume to potential employers.

5)      Open a retirement account. Singles tend to put off saving for retirement longer than couples and married folks. If you aren’t already contributing to your company’s 401(k), open an Individual Retirement Account (IRA), and start saving now in the amount up to the limit of the tax deduction you can take (this varies based on your age). Contributing to an IRA or 401(k) is also a great way to decrease your taxable income. If you’re single, the contribution you make to your IRA if your work doesn’t offer an option – up to $4,000 if you’re under 50 – is also fully tax deductible. Rules are less clear-cut if you contribute to an employer-sponsored plan. Check with your local tax expert or preparer if you have questions.

Looking for a way to give back this holiday season? There are a whole host of great causes to give to, and with so many people dealing with incredible hardship this holiday season, there’s never been a better time to give.

Not only does charitable giving make you feel good and help out a great cause, but giving to eligible charitable organizations is tax deductible. Just be sure you give before December 31^st if you want to take the tax deduction on your 2009 tax return.

At Instant Tax Service, we enjoy giving back to our community in the form of charitable giving. Here are a couple of national organizations we support:

TOYS FOR TOTS: The Marine Toys for Tots Foundation is a not for profit organization authorized by the U.S. Marine Corps and the Department of Defense to provide fundraising and other necessary support for the annual Marine Corps Reserve Toys for Tots Program.  Now in its 62^nd year, Toys for Tots provides joy and a message of hope to economically disadvantaged children through the gift of a new toy during the Christmas holiday season.   For more information, visit www.toysfortots.org

YMCA: The nation’s 2,686 YMCAs respond to critical social needs by drawing on our collective strength as of one of the largest not-for-profit community service organizations in the United States. Today’s YMCAs serve thousands of U.S. communities, uniting 21 million children and adults of all ages, races, faiths, backgrounds, abilities and income levels. The organization’s goals are to help children, families and individuals reach their full potential at every stage of life. To find your local YMCA, visit http://www.ymca.net

Looking for more? Try other national organizations like the YWCA, the Make a Wish Foundation, or the World’s Children Fund.

Great news coming out of the Senate this week as unemployment benefits are extended by up to 20 weeks in states hardest hit by job loss. The good news also extends to those interested in buying a new home who don’t foresee making the November 30^th deadline for the first-time homebuyer’s credit. The credit is due to be extended through June 30^th, 2010.

According to the National Employment Project, 7,000 people a day are currently losing their unemployment benefits, which are subsidized by a tax on employers. Unemployment has reached a 26-year high of 9.8% and shows no signs of getting any better over the next few months. Extending unemployment benefits is expected to help unemployed workers survive the downturn until the economy improves and more jobs become available.

Lawmakers also hope that extending and expanding the homebuyer’s credit will help revitalize the rocky real estate market and create and/or save jobs in the industry. This reasoning led to the expansion of the homebuyer’s credit to existing home owners in the proposed bill. Existing homeowners who have been in their home for at least five years can now receive a $6,500 tax credit if they purchase a new home.

The current tax credit seems to have successfully stabilized – or at least greatly improved – the housing market. Sales have increased, resulting in slightly fewer homes on the market. Fewer homes and more buyers means an increase in housing values. That’s the idea anyway, and the tax credit expansion is predicted to reduce inventory and increase housing values even more in the coming year.

If you plan on buying a home in the next few months and qualify for these credits, keep an eye on this legislation. It’s expected to pass, but speak with your local tax preparer before you file to be sure you qualify.

Lower your energy bill and your tax bill at the same time!

According to the IRS, there are a couple of great energy-saving credits you should be aware of as the frost starts nipping at your door.

Two popular energy credits were expanded earlier this year as part of the American Recovery and Reinvestment Act.  The first is the Nonbusiness Energy Property Credit. This credit can be taken for 30% of what you spend on eligible energy-saving improvements to your home, up to $1,500. Eligible improvements include efficiency heating and air conditioning systems, water heaters, stoves, and any labor costs associated with installing them.

What does it means? It means that if you spend $5,000 on energy improvements to your home before the end of the year, you can take a $1,500 tax credit. That’s like getting a $1,500 rebate just for making your home more energy efficient! These are tax credits, not deductions, so they will directly increase the size of your refund or reduce the amount of tax you owe this tax season. Keep in mind that installing these energy efficient appliances also means energy savings in your home. Now is a great time to start saving on energy costs.

Another tax credit for energy savings is the Residential Energy Efficient Property Credit. This one also gives you a tax credit in the amount of 30% of what you spend on energy improvements. Applicable energy improvements include solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. Again, one can also apply the labor costs for installing these systems. The great thing about this credit is… there’s no limit on the amount of the tax credit (except for fuel cell property)! Get a 30% credit whether you purchase $3,000 or $15,000 in improvements.

It’s important to remember that not all energy saving improvements to your home will qualify for these credits. The IRS recommends that you check the manufacturer’s tax credit certification statement before purchasing or installing any new equipment.  If you use a tax preparer to prepare your tax return, remember to bring in all records of the equipment you installed, including a copy of the manufacturer’s tax credit certification statement.

Then get back to your warm, energy-efficient home… and enjoy the rest of the season!