Just before its July 4 recess, Congress extended a deadline for the first-time homebuyer credit. Now the credit is available for a closing by Sept. 30, 2010 (instead of June 30), for contracts signed by April 30.

New legislation working its way through Congress could put a halt to a popular estate-planning technique. The crackdown limits the ability to avoid gift tax on transfers to a grantor annuity trust (GRAT). In particular, the proposed legislation no longer allows taxpayers to "zero out" a GRAT.

Do you own residential property that’s been producing a marginal profit or a loss the past few years? Short of raising the rent, you’re fighting an uphill battle as your expenses continue to grow each year. Surprisingly, many landlords don’t claim all the deductions they are entitled to. Here are the “top 10” deductions on the list:

This may be the year you finally convert your traditional IRA to a Roth. But who should you name as the beneficiaries? Usually, it’s the kids or grandkids. Instead, designate a trust as beneficiary. This way, you don’t have to worry about teenagers squandering the funds from an inheritance. The youngsters can gain full access to the funds at a specified age.

Q. In a recent article ("Exclude tax on home installment sale"), you said that installment sales must take place over two years. But isn’t the rule only that the payment must be received in the following year?

The new HIRE Act preserves the enhanced Section 179 deduction of $250,000 for assets placed in service in tax years beginning in 2010. Without the tax law change, the maximum deduction was scheduled to fall to $134,000. Strategy: Load up on new business equipment this year. It may be your last shot at a $250,000 instant write-off for the near future.

If your firm is tagged as a “personal service corporation” (PSC), it must pay tax at a flat rate of 35% (the current highest average tax rate for C corps). You can’t benefit from the graduated rate structure like other corporations. As a result, your company might have to fork over thousands of extra tax dollars each year. That’s what happened to a land surveying firm in a new case.

Q. I have several 401(k) plans from prior employers. Am I limited to one rollover to an IRA for 2010?

Q. I didn’t take my first required minimum distribution (RMD) in 2009 because of the waiver. Do I have until April 15, 2011, to take one for 2010?

Don’t expect the taxman to go easy on you in retirement. When you start collecting Social Security retirement benefits, up to 85% of the benefits may be taxable. Strategy: Be proactive about taxation of Social Security benefits. Depending on your situation, you can use one or more of four strategies to reduce or eliminate tax liability.

The homebuyer’s credit is drawing a lot of flak at the IRS. According to an April 15 report to the Senate Finance Committee by Nina Olson, National Taxpayer Advocate, more than 260,000 returns filed in 2010 have already been flagged for correspondence audits because taxpayers didn’t attach sufficient documentation for claiming the credit.

Q. My company is hiring workers who qualify for the new HIRE Act Social Security tax exemption. Can we claim the work opportunity credit for wages paid to the same workers?

Are you tired of paying tax twice on income as a C corporation owner? First, income is taxed to the corporation as it is earned and then again to you personally when it is paid out as dividends. To avoid the double tax whammy, consider a switch to S corporation status. But watch out for the built-in gains (BIG) tax.

Do you need someone to watch your young children during the summer months while you work? The full amount paid to a household worker can qualify for the dependent care credit even if the worker does other chores.

You might think of life insurance strictly as income replacement for your family if you should suddenly die. So, at some point, you don’t need that big whole life policy anymore. Strategy: Donate life insurance to charity. As long as you don’t retain any “incidents of ownership” in the policy—such as the right to change the beneficiary—you can claim a current tax deduction for your generosity.

A significant tax deadline may have come and gone for small charitable organizations. Due to a little-noticed provision in the Pension Protection Act of 2006, charities with annual revenue of less than $25,000 were required to file Form 990, Return of Organization Exempt From Income Tax, with the IRS by May 17, 2010.

Don’t tell your CPA any information you wouldn’t want the IRS to know. Although a 1998 law authorizes a “CPA-client privilege,” the privilege is hardly bullet-proof. It’s shot full of exceptions. Significantly, the confidentiality part of the privilege doesn’t extend to communications concerning the preparation of your tax return.

Q. I guaranteed a loan my cousin took out  for his business. Now I have to pay up because he is defaulting. Is this payment deductible?

In the past, it took two steps to transfer funds from a 401(k) plan to a Roth IRA, thereby effecting a Roth conversion contribution. The plan participant had to use a traditional IRA as a go-between. And certain high-income taxpayers couldn’t complete the deal in any event. But the rules have changed for the better.

A new report from the Treasury Inspector General (TIG) says that IRS auditors don't do enough to uncover tax deficiencies of sole proprietors. The IRS plans to revise its audit selection procedures for sole proprietors so that its examiners can address these issues in face-to-face meetings.

The tax law limits write-offs for vacation home rentals if your personal use exceeds the greater of 14 days or 10% of the days the home is rented. In that case, your deductions are limited to the amount of your rental income. Strategy: Make sure your annual use doesn’t cross the 14-day/10% barrier.

Take photos of your home or, even better, make a video showing the contents. Describe the items, their acquisition dates and their costs or approximate values. Then store it in a safe-deposit box. This is the best proof you can have if the property is ever damaged by a natural disaster ...

The IRS has quickly moved to implement the new tax breaks for employers in the Hiring Incentives to Restore Employment (HIRE) Act. Strategy: Have newly hired employees complete and sign Form W-11, the Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit. This new form is used to confirm that new hires are covered by the law.

Q. I have two IRAs with different amounts. If I convert both to Roth IRAs, can I pay all the tax on one this year and spread out the tax on the other?

The IRS has issued guidance to help small business owners make sense out of tax changes included in the monumental health care legislation. Although many provisions in the new law are prospective, the small business credit is available in 2010. The credit can potentially offset up to 35% of the health insurance premiums your business pays.