Tax breaks for almost everyone

You’ll find lots of new deductions, credits and expanded eligibility rules when you prepare your 2009 tax return.

There’s no denying that 2009 was a challenging year for most Americans, but there is some welcome relief out their in the form of new tax credits and deductions.

Here are the highlights of what’s new for 2009 returns.

Education Credit:
More parents and students can use a federal education credit to offset part of the cost of college under the new  American Opportunity Credit. The maximum credit is $2500. This new credit has higher income limits than the existing Hope and Lifetime Learning credits.

Home-Energy Credits:
If you weatherized your home or bought alternative-energy equipment in 2009, you may qualify for either of two expanded home energy credits, regardless of your income. The credit is worth 30% of the cost of your eligible home improvements on your principal residence, up to a maximum of $1500.  A second tax credit is designed to spur investment in alternative-energy equipment, such as solar systems, in new and existing homes.  The credit is also worth 30% of the cost, including installation, with no cap on the amount of the credit.

Home Buyers Credit:
First Time Homebuyers Credit and an Existing Homeowners credit are also available this year.  The First Time Home Buyers Credit is worth up to $8000. Existing homeowners may benefit up to $6500 for a qualified purchase. 

New Vehicle Purchase:
If you bought a new car, light truck, motorcycle, or motor home on or after 2/16/2009, through the end of the year, you may be able to deduct the sales tax you paid on the vehicle on your 2009 tax return.

Jobless Benefits:
Unemployed workers are allowed to exclude the first $2400 of unemployment benefits received in 2009.

These are highlights ONLY of the new tax breaks.  All of them have other rules and eligibility issues to consider.  Consult with your tax advisor to find out if you are eligible based on your individual circumstances.

The key to getting the most from your tax deductions is to get  organized, so you don’t miss ANY deduction. 

Please enter your name and email address to receive our Tax Organizer for the 2009 tax year.