Personal Finances & Taxes: IRS Adds 7 New Tax Laws Into Its Code
By Jeffrey Paulsen on April 13, 2010, 7:10 am Posted in Finance NewsWhile most Americans are scrambling to file their taxes, there are some important things to know about the new tax laws that could benefit your bank account.
Get Money For Spending Money
The very popular First-Time Homebuyer tax credit can benefit Americans who purchased a house within the last year. This credit is offering $8000 to consumers who purchased their first home or to consumers who have not owned a home for three years. Later the credit was expanded to include consumers who have owned their home for five years; these people are eligible for a $6500 tax credit. This credit is deducted dollar for dollar from the amount that you owe the IRS. If you owe them nothing, they will send it to you in the form of a tax return.
Another popular credit is the new-car sales tax deduction. This entitles consumers who purchased a new vehicle between Feb. 16, 2009 and Dec. 31, 2009 the ability to write off any sales tax or excise tax. A new vehicle is defined as a car, light truck, motorcycle and motor homes. These are limited by purchase price as taxes can only be written on sales prices up to $49,500.
Other Important Deductions
The American Opportunity Credit allows students to deduct $2,500 of their first $4,000 of qualifying educational expenses. If you owe the IRS nothing, then you are eligible to get up to 40 percent of the credit which means you could receive up to $1,000.
In keeping with the green movement, there is a tax credit that allows Americans to enhance their home energy and write off a portion of the costs; 30 percent of the cost of all qualifying upgrades can be written off with maximum credit of $1,500. Along the same lines, Bicycle Commuter Act provides Americans with the ability to accept fringe benefits from their company for commuting on a bicycle tax-free as a motorcyclist does.
Of note is the ability to write off the convenience fee that consumers pay for using their debit or credit card in order to pay their taxes online. Also included in the breaks are those who have lost their jobs. While unemployment compensation is considered taxable income, the first $2,400 is excluded from income.
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