Friday, February 5, 2010, AM | 3 Comments
For folks, who don’t do taxes themselves but get them done by professionals, I want to say this. Don’t be afraid to do them yourself. Each year, there are some changes in the tax code that you should know about before you file your taxes in the following year before April 15. Most of the changes are in favor of the tax filers. For example, if you bought a new home or car, collected unemployment, invested in energy efficiency, there were tax incentives that most likely affected you. So take advantage of them wherever it’s applicable to you.
I have mentioned a few simple changes in this posts. Others that required more explanation, I have links to external websites, especially the Tax Credits. They are dollar-for-dollar refunds if applicable to your case.
- Standard Deduction
- Alternative Minimum Tax (AMT)
- Dependency Exemption
- Mileage Rates
- Child’s Investment Income
- New Car Purchases
- COBRA Premiums
- Unemployment Income
- Child Tax Credit
- Earned Income Tax Credit
- Child and Dependent Care Tax Credit
- Making Work Pay Credit
- American Opportunity Tax Credit
- First-Time Home-Buyer Tax Credit
- Non-First-Time Home-Buyer Tax Credit
- Education Tax Credits
- Alternative Motor Vehicle Tax Credit
- Federal Tax Credits for Consumer Energy Efficiency
Tax Credits you might be able to take advantage of.
According to IRS, more than half (60% to be exact) of the tax filers take standard deduction instead of itemizing. The standard deduction has been increased for all kinds of tax filers.
- Single – $5,700
- Married filing separately – $5,700
- Head of household – $8,350
- Married taxpayers filing jointly – $11,400
- Qualifying widow/widower – $11,400
- $46,700 for Single.
- $70,950 if married filing jointly or qualifying widow(er).
- $35,475 if married filing separately.
- $6,700 for child whose unearned income is taxed at the parent’s rate.
The 2008 value of $3,500 has increased to $3,650 in 2009.
- Business – 55.0 cents a mile
- Charitable Services – 14.0 cents a mile
- Medical Travel – 24.0 cents a mile
In a Nutshell
There you have it. I probably have missed mentioning a few things. But whatever you can under the law, take advantage of the new deductions, exemptions and especially the tax credits if they are applicable to your case.