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New Mexico Income Tax Help – What Credits, Rebates and Deductions are available?
By:
Dianne Goodman
Who qualifies for the rebates and deductions?
There are credits, rebates and deductions that many taxpayers may not know about that can give you some New Mexico income tax relief. To qualify for any of the income tax credits and rebates you must be a New Mexico resident during any portion of the tax year, be present in New Mexico at least six months of the year and not be a dependent of another taxpayer. You must also meet the Modified Gross Income limitation in order to qualify.
What types of income tax rebates, credits and deductions are there?
You may qualify for the Low Income Comprehensive Tax Rebate if your Modified Gross Income is $22,000 or less.
If you are 65 or older, you may qualify for the Property Tax Rebate if your Modified Gross Income is $16,000 or less. There is a credit available regardless if you rent or own. For Los Alamos County residents, you may also qualify for an Additional Low Income Property Tax Rebate if your Modified Gross Income is $24,000 or less.
The New Mexico Child Day Care Credit is available for taxpayers who have Modified Gross Income of $21,424 or less and have day care expenses.
Of course if you pay income tax to another state, you may also claim a credit for those taxes against your New Mexico tax liability.
There are also deductions available to taxpayers which are unique to New Mexico. Some of these items include New Mexico tax-exempt interest and dividends, interest received on US Government Obligations and income of persons 100 years or older. Additional deductions include Net Capital Gains Deduction and nonresident military wages or salary. There are also exemptions if you are 65 or older or blind, adopted special needs children or have a New Mexico Medical Care Savings Account. While these credits, rebates and deductions are not comprehensive, they include the items most taxpayers may qualify for.
Where do you report these income tax credits, rebates and deductions?
You should report the deductions and income tax paid to another state on the PIT-ADJ form. For all other income tax credits and rebates, you should report them on the PIT-1-RC form. These forms are attached to your PIT-1 form which is due on April 15th.
There is something for almost everybody.
And something that benefits those New Mexicans that may be in higher income tax brackets, the 2005 highest income tax bracket for all New Mexicans is 6%, down from 6.8% for 2004. This will affect single individuals if their New Mexico taxable income is more than $26,000, married individuals if their New Mexico taxable income is more than $40,000 and heads of household if their New Mexico taxable income is more than $33,000. Thanks for the relief!
These are just some income tax items you should consider when thinking about your income taxes. If you have a specific question about your particular situation, you can e-mail me at dianne@dgoodmancpa.com.
This article was intended to provide general information about New Mexico income tax help. It does not contain all the rules and exceptions that may apply to your situation. If you have further questions, I can be reached at www.dgoodmancpa.com.
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New Mexico Income Tax Help – What Credits, Rebates and Deductions are available? by Dianne Goodman, visit http://www.dgoodmancpa.com for more content like this.
About the author:
Dianne Goodman, CPA – Specializes in servicing Small Businesses and Individuals. Visit www.dgoodmancpa.comfor relevant and current information on a variety of financial and tax issues focusing on small businesses and individuals or call at 1-866-531-3035.
CONTACT INFORMATION:
Dianne Goodman, CPA
Comprehensive Small Business Solutions, PC
505 323-2307
1 888-851-1975 toll free
http://www.dgoodmancpa.com
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