The Internal Revenue Service (IRS) does not have a reputation for being a good guy. In the current crisis, however, the IRS has been one of the few government agencies taking action that actually helps the individual taxpayer. They have provided guidance on the Mortgage Debt Forgiveness Act and expedited the process for removing or subjugating government liens. Now they are reminding taxpayers of two other benefits they may be eligible for that will lessen their 2008 tax burden.

With 2009 only a day a way, the IRS urges taxpayer not to put off preparing their tax files or their year-end tax planning. Among the tax tips to consider are:

First Time Home-buyers Tax Credit ? First-time home buyers and those who have not owned a home during the past three years are eligible for a credit equal to 10 percent of the purchase of the home up to $7,500. This new tax credit is only available for a limited time. It applies only to primary homes purchased between April 9, 2008 and June 30, 2009. The credit is fully refundable however, it operates like a no-interest loans which must be repaid over a period of 15 years. Either single taxpayers or married taxpayers filing jointly may claim the credit using IRS Form 5405.

The first-time home buyers tax credit was part of the Housing and Economic Recovery Act of 2008.

Real Estate Tax Deduction ? Taxpayers who pay real estate taxes are eligible for this additional standard deduction even if they don’t itemize the deductions when filing their tax returns. Simply Enter the amount of the deduction on Line 6 of Form 1040 Schedule A. The amount of the deduction is equal to the amount paid in real estate taxes up to $500 for a single filer or $1,000 for joint filers. The deduction is available for the 2008 and 2009 tax years, however, to claim the deduction this year you must have paid the real estate tax before January 1, 2009. Claiming this deduction increases your standard deduction.

The real estate tax deduction is especially good news since communities across the country have begun raising real estate and property taxes as a means of increasing revenues. Some communities, like Hoboken, NJ have seen real estate taxes increase almost half over (47 percent) while others such as East Hanover Township, PA saw in change at all. Taxpayers whose real estate and property taxes are paid by their mortgage company pays the taxes. They should receive a statement or receipt indicating the amount of tax assessed and paid. The amount may also be shown on the end-of-year statement provided by the mortgage company for tax purposes.

Tax-free Profits from the Sale of a Home ? Under certain conditions, taxpayers who sell their primary homes for more than they initially paid for the home may qualify to exclude all or part of the profits from their taxable income. IRS Publication 523, Selling Your Home, provides the rules and worksheets for determining whether you qualify for the exclusion.

Individual taxpayers can find information on these tax tips as well as others online at the IRS website ( www.irs.gov) IRS Publication 17, Your Federal Income Tax, is a comprehensive tax guide for individuals containing more than 900 links in nearly 300 pages. Printed copies of Publication 17 will be available in January 2009.

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