Some of the key tax incentives of The American Reinvestment and Recovery Act of 2009 will directly impact your 2009 tax return. Here are just a few:
Child Tax Credits -- For 2009 and 2010, taxpayers with a qualifying child(ren) and income between $3,000 and $8,500 will also be eligible to receive the Child Tax Credit, which will allow more taxpayers than ever to receive the additional Child Tax Credit.
New Car Purchases -- Taxpayers may deduct the sales or excise tax paid on up to the first $49,500 of the purchase price of a new vehicle, as an itemized deduction or as an addition to their standard deduction. In addition, “plug-in” vehicles are eligible for a credit of up to $7,500 for the first 200,000 “plug-in” vehicles sold per manufacturer.
Making Work Pay Credit -- For 2009 and 2010, qualifying taxpayers with an adjusted gross income (AGI) of less than $95,000 ($190,000 if MFJ) will be eligible for a credit of 6.2% of earned income up to $400 ($800 if MFJ).
First-Time Homebuyer Credit -- Taxpayers who purchase a qualifying new home after December 31, 2008 and before May 1, 2010, may claim a refundable credit of 10% of the purchase price up to $8,000 ($4,000 if married filing separately). In addition, if the home is purchased during this time the credit does not have to be repaid unless the taxpayer sells the home within 36 months. Beginning November 7, 2009, taxpayers who lived in their current home for five consecutive years out of the eight years preceding the purchase of a new home may qualify for a reduced credit of $6,500 ($3,250 if married filing separately. Note: Taxpayers who enter into a binding contract to close on a home before May 1, 2010 may still qualify for the credit if they close before July 1, 2010.
Education Credit -- For tax years 2009 and 2010, the New American Opportunity credit will replace the Hope Credit. The credit allows for up to $2,500 for eligible expenses for the first four years of post-secondary education and allows 40% up to $1,000, of the credit to be refundable.
Questions? Contact your local Jackson Hewitt office.