It’s time to file your 2009 income tax return, and that means it’s also time to find out what tax breaks, credits or deductions can help you out once you fill up your forms. Here are some of the good breaks you can use.
For the jobless
The unemployed can now remove from taxation the first $2,400 in unemployment benefits received during 2009.
Homeowner breaks
For 2009, a first-time homebuyer’s tax break will be available. You can claim up to 10% of the house’s base price, up to a maximum of $8,000, if you didn’t have a principal house for three years before purchasing a house last year. Different income limits apply, depending on when you bought the house: a maximum of $75,000 if single and $150,000 for couples if you bought the house before November 7, 2009. After that, the maximum for singles is $175,000 and for couples it tops out at $225,000. Be aware that these figures are for the full $8,000 amount; the credit will gradually get less the higher your income is.
There is also a $6,500 maximum credit for long-time homeowners who’ve bought a house after November 7. This credit has similar eligibility guidelines to the post-November 7 rules for first-time homebuyers.
Energy credits
There are two tax credits for energy efficiency. The first is 30% of the value of home improvements you’ve made to your principal house, with a maximum of $1,500. This includes qualified heating and cooling systems, water heaters, stoves, materials used for insulation and weatherizing materials for skylights, windows and doors. You have to spend up to $5,000 to be eligible for the tax break.
The second energy tax break is for using alternative energy sources, such as solar electrical and water heating systems, wind turbines and geothermal heat pumps. You can get back as much as 30% of the cost, with no upper limit.
Vehicles
If you bought a vehicle from February 16 onward, you can deduct the state or local sales tax. This also goes for excise taxes. The break is limited to the tax as it applies to $49,500 of the purchase price. However, there is no limit to how many vehicles you have that can qualify. Motorcycles, cars, light trucks and motor homes qualify. Same as the first-time homebuyer tax break, there are income limits to think about for the full credit: $125,000 for single people and $250,000 for married couples. Beyond that, and the credit eventually peters out.
School credit
A maximum of $2,500 in tax credits is available for those who have paid at least $4,000 in qualified tuition and related costs and expenses. Full credit is available if your income is $80,000 and below. For couples, the limit is set at $160,000. Beyond the income limits, the credit phases out gradually.
Sign up on the box at the right for more information on 2009 tax deductions you can use on your return, and other options as well.
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