Tax credit for workers: for 2009 and 2010 there is a “making work pay” tax credit of up to $400 for working individuals and up to $800 for couples filing joint returns. The credit was advanced to most taxpayers through reduced withholding throughout the year.
Temporary suspension of taxation on unemployment benefits: the jobless get a little more help with a $25 increase in weekly benefit checks through 2009 and suspension of federal tax on the first $2,400 of unemployment benefits received in 2009
Retirees and disabled individuals: those receiving government benefits, including Social Security, Railroad Retirement, SSI, and VA benefits received a one-time payment of $250 in 2009
First-time home buyer credit: increased to $8,000 for qualified first-time homebuyers purchasing homes after Dec. 31, 2008 and before May 1, 2010; repayment requirement waived unless sold or no longer principal residence within 36 months. Also, if you enter into a binding contract to buy the home by that date you still qualify if the closing is before July 1, 2010.
Temporary suspension of taxation on unemployment benefits: the jobless get a little more help with a $25 increase in weekly benefit checks through 2009 and suspension of federal tax on the first $2,400 of unemployment benefits received in 2009
Retirees and disabled individuals: those receiving government benefits, including Social Security, Railroad Retirement, SSI, and VA benefits received a one-time payment of $250 in 2009
First-time home buyer credit: increased to $8,000 for qualified first-time homebuyers purchasing homes after Dec. 31, 2008 and before May 1, 2010; repayment requirement waived unless sold or no longer principal residence within 36 months. Also, if you enter into a binding contract to buy the home by that date you still qualify if the closing is before July 1, 2010.
A reduced credit up to $6,500 is also now available for long-time homeowners. These are homeowners who have lived in their homes at least 5 consecutive years out of the 8 years before buying and moving into a new principal residence. This new credit is for homes purchased after Nov. 6, 2009.
“American Opportunity Tax Credit” for education: an ‘enhanced’ Hope credit applies to the first four years of college; it provides 100% credit for the first $2,000 and 25% for the next $2,000 on qualified expenses such as tuition and books; the credit is 40% refundable, meaning even taxpayers who have no tax liability can receive a credit for 40% of qualified college expenses, up to $1,000
529 plans: qualified computer technology and equipment is now allowed as higher education expenses from the plan, so distributions from 529 plans to buy a computer, for example, for college will not be taxable
Earned Income Tax Credit: increased EITC amounts for families with 3 or more children and additional marriage penalty relief
Additional Child Tax Credit: earnings threshold is lowered to $3,000, helping more people qualify for the credit and receive more money; for 2008 the earnings threshold was $8,500
Vehicle purchase: state and local sales taxes paid for purchases of qualified new motor vehicles are deductible either as part of the standard deduction or as an itemized deduction; the per vehicle deduction is limited to the tax that would be paid on a vehicle that cost $49,500.
AMT: the one year typical patch for 2009 of the Alternative Minimum Tax (AMT) to prevent as many as 24 million middle-income households from being hit with a tax that was originally designed to prevent the very wealthy from avoiding taxes.
“American Opportunity Tax Credit” for education: an ‘enhanced’ Hope credit applies to the first four years of college; it provides 100% credit for the first $2,000 and 25% for the next $2,000 on qualified expenses such as tuition and books; the credit is 40% refundable, meaning even taxpayers who have no tax liability can receive a credit for 40% of qualified college expenses, up to $1,000
529 plans: qualified computer technology and equipment is now allowed as higher education expenses from the plan, so distributions from 529 plans to buy a computer, for example, for college will not be taxable
Earned Income Tax Credit: increased EITC amounts for families with 3 or more children and additional marriage penalty relief
Additional Child Tax Credit: earnings threshold is lowered to $3,000, helping more people qualify for the credit and receive more money; for 2008 the earnings threshold was $8,500
Vehicle purchase: state and local sales taxes paid for purchases of qualified new motor vehicles are deductible either as part of the standard deduction or as an itemized deduction; the per vehicle deduction is limited to the tax that would be paid on a vehicle that cost $49,500.
AMT: the one year typical patch for 2009 of the Alternative Minimum Tax (AMT) to prevent as many as 24 million middle-income households from being hit with a tax that was originally designed to prevent the very wealthy from avoiding taxes.
No comments:
Post a Comment