Gift Tax Limit 2010

If you give away a lot of money, then you could be responsible for paying federal gift tax. Currently you can give away around $13,000.00 to any amount of people without having to pay federal gift tax.You also have a one million dollar lifetime limit on gifts.

Gift Tax Limit

If you plan on giving away more than that then you may want to do some pre-planning so neither you nor the recipients of your gifts owe taxes on them. The gift tax was created to make it more difficult for taxpayers to avoid paying estate tax.

Here are some helpful tips when giving away large amounts of money or assets:

• You and your spouse can give away up to $26,000.00 annually to any number of people.

• You have a lifetime limit of $1,000,000.00 to give away tax free.

• The gift cannot have any exclusions and is money or property given away without an expected return.

• If you must claim the federal gift tax on your gifts then you must file using Form 709.

• Giving away property or money before your death can provide a huge tax savings to your friends and family.

• If you pay someone else’s medical expenses then you must pay them directly to the care provide for them to be considered a gift.

It is also important to know that gifts of educational expenses will not be taxed under the federal gift tax limit rules. This includes payments directly made for education, books, supplies, and other related living expenses. Charitable gifts and gifts to your spouse are also not taxed.

You are allowed to give up to one million dollars in gifts above the annual limit in your lifetime without having to pay taxes. This means you need to plan carefully to ensure you do not exceed your annual limit as well as your lifetime limit.

To find out if you owe federal gift tax or to learn more about the gift tax limit, visit TurboTax Online.

Insulation Tax Credit

Many of the energy-efficiency improvements made to your home fall within the qualifications of the Insulation Tax Credit. The following information pertains to the eligibility and qualifications that allow you to claim the insulation tax credit.

Some, though not all, energy-efficient products qualify for the insulation tax credit. There are three parts to the energy efficiency improvement tax credit which allow you to claim 30% of the cost with other stipulations.

The first home improvement tax credit can be claimed for the following products:

• Heating
• Ventilation
• AC (HVAC)
• Insulation
• Roofs (Metal & Asphalt)
• Water heaters (non-solar)
• Windows and doors

You can claim 30% of the cost up to $1,500; the insulation tax credit expires December 31, 2010. You must meet the criteria of the product being placed in an existing home and it must be your principal residence; rentals do not qualify.

The second home improvement tax credit can be claimed for the following products:

• Geothermal heat pumps
• Small wind turbines for residential use only
• Solar energy systems

As with the first credit, you can claim 30% of the cost, but this time with no limit on the total amount; the second tax credit expires December 31, 2016. These products must be placed in an existing home or new construction home that is used as your principal residence or 2nd home. Rentals do not qualify.

The third home improvement tax credit can be claimed for the following products:

• Fuel Cell
• Fuel Cell and micro turbine system

You can claim 30% of the cost up to 500 per .5KW of power capacity; this tax credit also expires December 31, 2016. There is one more stipulation that must be met before you can claim this credit: the product being replaced must be in an existing home or a new construction home and the home must be your principal residence; 2nd homes and rentals do not qualify.

To learn more about the home improvement insulation tax credit and other realted energy efficient tax credits visit TurboTax Online.