Friday, December 11, 2009

Don't Miss Out on the 2009 Tax Credits

The American Economic Recovery and Reinvestment Act (ARRA) of 2009 passed on February 17, 2009 provide tons of tax credits on 2009 and some in 2010 for taxpayers. Don't miss out on these tax credits that can help reduce your taxes and get you a bigger tax refund. Here are 10 Tax Credits for Individuals in 2009.

1. First-Time Homebuyer Credit Expands. Homebuyers who has not owed a home in the past 3 years and purchase in 2009 can get a credit of up to $8,000 with no payback requirement. New legislation extends and expands this credit. If you purchased a home (went to settlement) before 11/7/09 the credit is phased out for those with incomes of $75,000 or above. If you purchased your home after 11/6/09 you can get an additional $6,500 for long who owed a home for at least 5 of 8 years leading up to the purchase. The credit is phased out for those with incomes of $125,000 or more.

2. New Car Purchase. Taxpayers who buy certain new vehicles in 2009 (after 2/16/09 and before 12/31/09) can deduct the state and local sales taxes they paid or other taxes and fees they paid in states that have no sales tax.

3. American Opportunity Credit. The credit modifies the existing Hope Credit for tax years 2009 and is available to taxpayers with higher incomes and those who owe no tax. It adds required course materials as a qualifying expense and allows the credit to be claimed for four post-secondary education years. The credit is phased out for those with incomes above $80,000.

4. Earned Income Tax Credit. Enhanced Credits for Tax Years 2009, 2010. Find details on the earned income tax credit and the additional child tax credit.

5. Child Care Credit. If you pay child care expenses using a Flexible Spending Account or similar feature through your employer and spend more than $5,000 during the year the additional money spent will quality you for the credit up to $1,000.

6. Making Work Pay Credit. Due to changes in the tax withholding tables many Americans took home bigger paychecks this year. The credit is up to $400 for individuals and up to $800 for married couples.

7. Unemployment Benefits. You can claim up to $2,400 in unemployment benefits.

8. Economic Recovery Payment. If you are a recipient of Social Security, Disability, Veterans or Railroad Retirees benefits you may be eligible to receive a one-time payment of $250.

9. Special Credit for Government Retirees. Certain government retirees who receive a pension from work and are not covered by social security may be eligible to receive a one-time payment of $250.

10. Energy Credit. Increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The credit rate for 2009 increases to 30% of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements made in 2009.

For more information visit the IRS website.

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