More Tax Breaks For 2010
More Stimulus Checks, Social Security Payments & Tax Credits in 2010
, 2011 and Beyond. All the tax credits/deductions & payments provided in the immense 2009 economic stimulus package will be hard to surpass in coming years.
The good news is that there will be more credits & deductions available to most Americans in 2010, 2011 and after. These will continue to be funded from the $700 billion stimulus package, with additional funds coming from President Obama's ten year annual budget. For many Americans these payments are a big and much needed advantage in these hard economic times.
Whatever your view as it relates to the stimulus payments, many of these tax credits & deductions have been passed by Congress & signed into law by the President. So if you qualify, saying no to what amounts to free money is just bad personal finance. Therefore plan ahead and make sure you take advantage of these credits.
Extended till 2013
The Making work pay tax credit provides $400 for individuals and $800 for couples, phasing out completely at $190,000 for couples fling jointly and $95,000 for single filers. Because the credit is refundable (people can get it even if they owe no tax), most low income workers will also qualify for the full credit. If you're eligible, your payroll administrator will make the withholding adjustment automatically and increase your take-home pay. The average worker will see this tax credit in the form of a $10 & $20 pay rise per year based on your tax rate.
You may prefer not to adjust your withholding amount and can get your stimulus in a lump sum payment as a tax refund when you file your 2010 taxes. Under the 10 year Obama budget, this credit is set to be extended to 2013.
Mass Transit Fringe Benefit in 2010
Employees may exclude from income $230 per month in commuter transit benefits in 2010 (adjusted for inflation). These qualified transportation fringe benefits are excluded from an employee's gross income for income tax purposes & from an employee's wages for payroll tax purposes.
Energy Credits in 2010 and 2011
Given the President's strong focus on the environment & clean energy, it was not surprising to see additional tax credits for home energy efficiency improvements. The stimulus package provided for a uniform credit of 30% on the cost of qualifying improvements up to $1,500, such as adding insulation, energy-efficient exterior windows, & energy-efficient heating and air conditioning systems. The credit can be claimed via your tax returns in 2010 & 2011 for improvements placed in service during 2010.
Education Credits claimable in 2010 and 2011
The New American Opportunity Credit modifies the existing Hope Credit for tax years 2010, making it available to a broader range of taxpayer's, including many with higher incomes and those who owe no tax. It also adds required course materials to the list of qualifying expenses. Many of those eligible will qualify for the maximum annual credit of $2,500 per student. It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for 4 post-secondary education years instead of 2. The full credit is available to individuals, whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. Many of those eligible will qualify for the maximum annual credit of $2,500 per student, so make sure you look into it, to help with rising college costs. There are also provisions in the 2010 budget to increase the maximum Pell Grant for college students, from low income households, in the next school year to $5,500.
by: Sandi Lattin
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