Tax Relief & the Tax Code Changes During the Tax Season

Tax season is quite nightmarish for majority of the tax payers. However, the truth is, tax relief is not that hard to be gained by most of the Americans considering the tax code changes.

Here are various tax code changes that may help the tax payer avail the tax relief during the season. :

• Foreclosure Relief - The federal government has introduced few changes to provide relief to large numbers of tax payers who lost their houses due to foreclosure. Debt forgiven because of foreclosure, or loan restructure, apart from other applicable conditions, are not to be treated as income. Besides, IRS will now allows for up to a certain limit of forgiven debt to be excluded from the income of the tax payer. However, it should be remembered that this tax relief is applicable only to the homes that are being used as a residence by the tax payer (rather than being locked and left for long spans of time).
• AMT Exemptions - Congress allows AMT Exemptions to provide tax relief to millions of middle class tax payers. The exemptions allow different tax deductions for the singles, married couples, and the heads of the households. Whatever category you belong to, you may avail the tax relief accordingly. Besides, the tax payer may avail a full IRA deduction as allowed by the higher income IRA limits. Few conditions need to be fulfilled, in case, the modified AGI (adjusted gross income) is less than the fixed limit. The limit varies for both, the singles as well as the married couples filing jointly.
• Higher 401(k) Limits - Higher 401(k) Limits and the federal Thrift Savings Plan allow various exemptions from the tax based on the employees’ income. However, the exemptions vary for those who are above 50 and others who have not yet celebrated their 50th birthday. You may avail the tax relief depending on your age and other applicable conditions.
• Tax Free Employee Parking - Employee parking paid by the employer is not to be considered as additional income (for the employees) up to a certain limit per month. However, if the parking fee crosses the figure, it will, of course, be considered as additional income for the employees.
• Higher Personal Exemptions - The personal exemption amount is raised from time to time during the tax years. In case, the tax payer keeps his knowledge update, he can avail maximum tax relief.

Besides the tax code changes specified above, you may avail tax relief as allowed by many others. It’s best to seek professional help while preparing taxes lest you may deprive yourself of the benefits granted by the tax code changes simply because of ignorance. A tax expert may look into your current and the previously filed returns, income, expenditure, balance sheets, bank accounts, etc., and suggest the tax code changes accordingly. It may also help you not to overpay the taxes. And that’s a tax relief in itself!