Here are some of the tax breaks in the recovery act that you may be eligible for:
RECOVERY ACT TAX RELIEF
Major Tax Benefits
Taxpayers can collect on more than a dozen 2009 Recovery Act tax benefits when they file their 2009 tax returns, including:
Making Work Pay - Ninety-five percent of working families are receiving the Recovery Act’s Making Work Pay tax credit of $400 for an individual or $800 for married couples filing jointly in their paychecks in 2009 – and will continue to in 2010.
Taxpayers whose withholding in 2009 did not provide the full amount of the credit they are due will get the additional amount when they file their 2009 tax return. Even though most taxpayers received the benefit of this credit in their paychecks from adjusted tax withholding by their employers, they still need to claim this credit on their tax returns (i.e., Form 1040 or 1040A).
Up to $2,500 in College Expenses – Families and students are eligible for up to $2,500 in tax savings under the American Opportunity Credit as well as enhanced benefits under 529 college savings plans, which help families and students pay for college expenses.
American Opportunity Credit – More parents and students are eligible for a tax credit of up to $2,500 to pay for college expenses and can claim the credit annually for four years instead of two.
529 College Savings Plans – Students can now use a 529 plan to pay for computer technology, adding this to the list of traditional college expenses (tuition, books, etc.) that can be paid for by a 529 plan.
Up to $8,000 for Purchase of First Home – Homebuyers can get a credit of up to $8,000 for first homes purchased by April 30, 2010 under the First Time Homebuyer tax credit. Long-time residents who don’t qualify as first-time homebuyers and those with incomes of up to $145,000 for an individual and $245,000 for joint filers are also eligible for a reduced credit.
Up to $1,500 in Energy Efficiency and Renewable Energy Incentives – Taxpayers are eligible for up to $1,500 in tax credits for making some energy-efficiency improvements to their homes such as adding insulation and installing energy efficient windows.
Money Back for New Vehicle Purchases – Taxpayers can deduct the state and local sales taxes they paid for new vehicles purchased from Feb. 17, 2009 through Dec. 31, 2009 under the vehicle sales tax deduction. In states that don't have a sales tax, some other taxes or fees paid may be deducted.
Expanded Family Tax Credits - Moderate income families with children may be eligible for an increase in the Earned Income Tax Credit and the additional Child Tax Credit.
Earned Income Tax Credit – The Recovery Act increased the credit for families with three or more children, bringing the maximum amount to $5,657.
Child Tax Credit – More families will be able to take advantage of the child tax credit under the Recovery Act, which reduced the minimum amount of earned income used to calculate the additional child tax credit to $3,000 from $12,550.
Up to $2,400 in Unemployment Benefits Tax Free in 2009 – Unemployment benefits are normally taxable, but the Recovery Act made the first $2,400 of unemployment benefits received in 2009 tax free.
