James E. George, CPA, PA

Beginning in 2007 all charitable contributions must be evidenced by a receipt or banking record in order to be deductible. Putting cash in the church collection plate does not qualify. Contributions paid with a check or credit card provide you with the banking record you need to prove the donation for tax purposes.

Taxpayers who didn’t own a principal residence during the past three years and purchase a home this year before December 1 (purchase must close before this date) can receive a credit of up to $8,000 on their 2009 income tax return.

For 2009 and 2010, the law expands the definition of qualified higher education expenses to include expenses for computer technology and equipment or Internet access and related services to be used by the designated beneficiary of the qualified tuition program (QTP or 529 plan) while enrolled at an eligible educational institution.

For 2009, the first $2400 of unemployment benefits you receive are not taxable. All benefits over that amount are taxable at your normal tax rate.

The standard vehicle mileage rate for vehicles used for business purposes was 55 cents per mile for the entire year.

The IRS regulations state that "adequate contemporaneous records be maintained to support all vehicle related deductions." By adequate, they mean the date, location and odometer reading or other documentation to prove the trip occurred. By contemporaneous they mean records recorded on an ongoing basis not recreated at the end of the year. This is an area this IRS is really starting to scrutinize. It is important to keep good records of the business, charitable and medical use of your vehicle if you plan to deduct these expenses.

You do not get a deduction for contributing to a Roth IRA like you do with a traditional IRA. The tax savings related to a Roth is the deferral of taxes on the earnings of the plan. The income earned by investments in a Roth IRA are not taxed to you on an annual basis. Instead the earnings accumulate in the plan tax free. If you draw out the money after achieving the age of 59 1/2 and the money has been in the plan at least five years, it all comes out tax free!

The sale of your personal vehicle under our federal "cash for clunkers" program is not a taxable transaction. However, if the vehicle you sold was used in a business there could be tax implications.

Yes, if you bought the vehicle after February 16, 2009, you may deduct state or local sales taxes on Schedule A (if you itemize). If you are not itemizing, you may still claim the deduction on Schedule L.

For federal income tax purposes you can claim the money paid to your child care provider even though they are not licensed. For Maryland income tax purposes, however, you cannot. Maryland requires child care providers to be licensed or you don't receive a tax deduction.

Gambling losses are only deductible to the extent of gambling winnings. If you have not won any money then your losses are not deductible. Always save your losing tickets throughout the year. We once had a client, who was a moderate gambler, throw away his losing tickets all year long. In November, he won $5,000 from a MD Lottery scratch off ticket. He had no records to document his losses to offset his winnings because he threw away his losing tickets from January thru October.

If your taxes owed are less than $1000 then no penalty will apply. If over $1,000 you will probably be assessed two types of penalties, late payment penalty and an underpayment penalty.