New Tax Credits You Should Know About Before Filing Your Taxes

World News

The
American Recovery and Reinvestment Act was signed on 2/17/09 . This
act is designed to stimulate the economy by giving tax credits and
breaks to encourage consumer spending . While it has been slow in
getting started there has been positive results as sales begin to
turn upward again.

While
we are waiting for the reinvestment act there are some tax breaks
for individuals that you can use when filing your 2009 taxes to
maximize your return and stimulate your own consumer spending.

If
you purchased a house during 2009 that is your primary residence
you qualify for an $8,000 credit. There used to be a credit for
first time home buyers of $7500 but you eventually had to pay it
back. This new credit is yours penalty free . $500-$1000 can be
deducted from your real estate taxes paid.

There
is a new Making Work Pay credit of $400 per worker and $800 per
couple. This credit is useful because it will decrease taxes more
than 95% for working families. If you choose not to take part in
this credit and have a higher paid amount from each pay period, you
will need to file a new W-4 with your employer to change the amount
withheld.

Unemployed
persons are exempt from being taxed on their unemployment checks for
up to the first $2400.

If
you purchased a car after February 17th, 2009; you can deduct the
state and local sales tax on your standard and itemized deductions.

The
Earned Income Credit or EIC has been expanded to allow credit for up
to three children when before it had a two maximum. The AGI phase out
limits have been adjusted so that married spouses who file jointly
do not have to worry about the marriage penalty .

The
American Opportunity Credit will now allow up to four years of degree
costs compared to Hope allowance which only allowed for two. The
amount of the credit has also increased from $1800 to $2500. You can
now write off the cost of books and required software.

Other
educational credits include: the Hope credit which now allows 100% of
the first two thousand in eligible expenses and 25% of the second
$2000 for each eligible student . The Lifetime Earning Credit has
expanded to include computer hardware, software and internet
expenses.

Home
energy efficiency and improvements can be credited up to fifteen
hundred dollars. The percent of the credit has increased to 30% and
can roll over into the next tax year until the amount of the credit
is used.

Military
persons stationed out of the country for 90 days or more between
12/31/3008 and 5/1/2010 qualify for an extension on filing.
AdditionallyBusiness Management Articles, government retirees and disable veterans qualify for a
credit of $250.

Leave a Reply

Your email address will not be published. Required fields are marked *