Monday, March 15, 2010

Questions for the Tax Lady: March 15th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: Are moving expenses tax deductible?

Not really. If you have to relocate for a job, then you can deduct the related costs. However, you must pass the IRS’ time and distance test. Meaning you must work full time for at least 39 weeks the first year after starting the new job, and your new place of work must be at least 50 miles further from your former place of residence than the old job was. For more information on moving related deductions check out this entry on the RDTC Tax Help Blog.

Question #2: Is it true the federal tax adoption credits are going to expire at the end of the year?

No, the tax credits are not going to go away entirely at the end of the year. However, the credit will be reduced by 50% (from $12,170 in 2010 to only $6,000 in 2011) unless congress extends the Tax Relief Reconciliation Act of 2001. Although the Senate and House are busy with controversial issues like health care reform and job creation, adoption credits are very popular and I would expect that Congress will extend the full credit, and possibly even increase its dollar value.

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