Homebuyer Credit Expanded and Extended

The Worker, Homeownership and Business Assistance Act of 2009, signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts.

Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.  

The new law also:

	Authorizes the credit for long-time homeowners buying a replacement principal residence.
	Raises the income limitations for homeowners claiming the credit.

Sales Tax Deduction for Vehicle Purchases

The American Recovery and Reinvestment Act permits taxpayers to take a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles. The deduction is available on new vehicles purchased from Feb. 17, 2009, through Dec. 31, 2009. In states that don't have a sales tax, the law provides a deduction for other taxes or fees paid. This deduction is available whether or not a taxpayer itemizes deductions on Schedule A. The deduction is limited to the taxes and fees paid on up to $49,500 of the purchase price of an eligible vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify. Taxpayers who make qualifying new vehicle purchases this year can estimate the deduction with the help of IRS Publication 919, How Do I Adjust My Withholding? Lines 10a to 10k on Worksheet 10 take into account purchases above the $49,500 limit, as well as the reduced deductions for taxpayers at higher income levels.

Tax Exemption for Unemployment Benefits in 2009

Under the American Recovery and Reinvestment Act (ARRA), the first $2,400 of unemployment benefits an individual receives in 2009 are tax free. This provision applies only to benefits received in 2009: Normally, unemployment benefits are taxable.

Energy Incentives for Individuals in the American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act (ARRA) provides numerous tax incentives for individuals to invest in energy-efficient products. Residential Energy Property Credit (Section 1121): The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010. The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.

What is the tax credit for children?

Beginning in 1998, you may qualify for a tax credit of $400 for each of your qualifying children under the age of 17. This credit is increased to $600 for 2001, and increased to $1,000 in 2002

What is the HOPE credit?

With the HOPE credit, you may be able to claim a tax credit of up to $1,800 for each eligible student. The HOPE credit is allowed for the first two years of post secondary education and is based on the qualified higher tuition and related expenses paid during the year.

What is the lifetime learning credit?

With the lifetime learning credit, you may be able to claim a tax credit of up to $2,000 for the total qualified tuition and related expenses paid during the tax year, for expense paid after June 30, 1998. There is no maximum period for which the lifetime learning credit can be claimed.

Does having a disabled dependent (spouse) qualify as an additional deduction on your taxes?

Having a disabled spouse could qualify you for the "Credit for the Elderly or Disabled". It is computed on IRS Schedule R. You should see the form and instructions for additional information and if you qualify.

Are there any tax deductions that I can take on my federal return for Home Schooling my child?

There are no deductions or credits available for your federal return for home schooling a child.

What is the credit for two kids in day care and another in an after school program?

The child care credit on Form 2441 is used to claim a credit for child care exegeses incurred so that parents can work. On a joint return, both parents must have income in order for the expenses to qualify. Only the expenses for children under age 14 qualify.