Date: 2009-03-02

Jackson Hewitt Highlights Homeowner-Related Tax Benefits for Current and Future Tax Filing Seasons

PARSIPPANY, N.J., March 2, 2009 /PRNewswire-FirstCall via COMTEX/ -- From concerns about foreclosures to the economic stimulus package, homeowners are receiving a lot of attention. One reason is sheer numbers -- more than 67 percent of U.S. residents owned homes at the end of 2008, about the same as a year earlier, according to the U.S. Census Bureau.* That represents more than 200 million taxpayers who could potentially benefit from real estate-related deductions and credits.

Jackson Hewitt Tax Service(R) reminds homeowners to take advantage of existing real estate tax benefits when they file 2008 income tax returns and is making them aware of new tax benefits that will be available for 2009.

"Some of the most significant tax law changes for 2008 represent new credits and deductions for homeowners, and now the new economic stimulus package has introduced even more benefits that will come into play when filing a 2009 income tax return," said Mark Steber, vice president of tax resources at Jackson Hewitt Tax Service, Inc. "This is an extremely important time for taxpayers to be aware of how homeownership may affect the amount of taxes they owe -- or the size of their refunds -- both for this year's filing and next year's tax planning."

Benefits for This Year

New credits and deductions available to homeowners for the 2008 tax year include:

• Additional Standard Deduction for Homeowners Who Don't Itemize. For the first time, taxpayers who paid real estate taxes and are not otherwise eligible to itemize deductions can increase their standard deduction amount by the lesser of:
• Real estate taxes paid in 2008 OR
• $500 ($1,000 if married filing jointly)

For example, a married couple filing jointly with an income of $28,000 who did not itemize their tax return but paid $1,200 in real estate taxes in 2008 could increase their standard deduction amount by $1,000. This additional standard deduction would decrease their tax liability by $100.

• Mortgage Debt Forgiveness Relief: Homeowners who experienced foreclosure on their primary home can exclude the cancelled debt amount from their taxable income. For example, a married couple filing jointly with an adjusted gross income (AGI) of $35,000, and a home foreclosure that includes $10,000 in cancelled debt, could decrease their tax liability by $1,500 under this act. In the past, the $10,000 of cancelled debt would have been considered taxable income to the individual that owed the debt. The home must meet the following criteria:
• It must be the taxpayer's main residence
• The amount of debt forgiven cannot exceed $2,000,000
• The loan must have been used to buy, build or substantially improve the home.
• First-Time Homebuyers Credit: Taxpayers who purchased a new home for the first time after April 8, 2008, and before Jan. 1, 2009, may qualify for a refundable credit up to $7,500. Part of the American Housing Rescue and Foreclosure Prevention Act, this refundable tax credit works like an interest-free loan for all qualified taxpayers. The credit must be paid back in equal parts over a period of 15 years beginning in 2010. First-time homebuyers who purchased a home after Dec. 31, 2008, and before Dec. 1, 2009, may elect to claim the $8,000 credit on their original or amended 2008 tax return to receive their money faster.

Plan for 2009

The American Recovery and Reinvestment Act, more commonly known as the economic stimulus package, includes two new tax benefits that taxpayers should be aware of as they consider making improvements to their homes or purchasing a new home this year.

Energy Credit. For 2009 and 2010, homeowners can claim 30 percent of the cost for energy-saving improvements to their main home. This credit is a reinstatement of a credit available in previous years and has been updated to remove certain caps. Improvements include the installation of:

• heat pumps
• central air conditioners
• hot water heaters
• wood stoves
• oil furnaces

Energy-efficient improvements such as adding new insulation or installing qualified exterior windows, doors and skylights also qualify for the credit. The maximum total credit for 2009 and 2010 combined is $1,500, and the credit is non-refundable.

• First-Time Homebuyer Credit. Taxpayers who purchase a new home after Dec. 31, 2008, and before Dec. 1, 2009, may qualify for a refundable credit of up to $8,000 (or $4,000 if married and filing separately). Unlike the similar credit available for 2008, taxpayers only have to pay back the credit if they sell the home within three years after the date of purchase. This change will not affect taxpayers who qualified for the First-Time Homebuyer Credit on a home purchased after April 8, 2008, and before Jan. 1, 2009. Taxpayers who purchase a qualifying home in 2009 may elect to claim the $8,000 credit on an original or amended 2008 tax return and receive their money this year.

"Homeowners want to make sure that when they visit with the tax preparer this filing season, they bring along all pertinent home-related documents," added Steber. "Sitting down with a knowledgeable tax preparer will not only help them walk through the credits and deductions they may qualify for this year, but also alert them to the documents that will be important to have when they file their 2009 income tax return next year."

To find out more about tax changes that will affect homeowners this filing season, visit http://www.jacksonhewitt.com/ResourcesChangesFederal4/.

*U.S. Census Bureau, Census Bureau Reports on Residential Vacancies and Homeownership, http://www.census.gov/

About Jackson Hewitt Tax Service Inc.

Jackson Hewitt Tax Service Inc. (NYSE: JTX), with approximately 6,800 franchised and company-owned offices throughout the United States during the 2008 tax season, is an industry leader providing full-service individual federal and state income tax return preparation. Most offices are independently owned and operated. The Company is based in Parsippany, New Jersey. More information may be obtained at www.jacksonhewitt.com. To locate the Jackson Hewitt Tax Service(R) office nearest to you, call 1-800-234-1040.

Contact:

Sara Garibaldi
Ketchum (Public Relations)
646-935-4097
Sara.garibaldi@ketchum.com

Ally Gellert
Ketchum (Public Relations)
646-935-3924
Ally.gellert@ketchum.com

SOURCE Jackson Hewitt Tax Service Inc.

http://www.jacksonhewitt.com