Tax Laws That Can Help During Tax Season
In an economic downturn the changes seem sweeping. Just last year a number of tax laws were created to bail us out of dire situations. These are a few new tax laws that you should know about.
The first concerns new car sales and tax deductions. If you purchased a new vehicle, including a car, motorcycle, light truck or motor home, on or after February 16th 2009 and by December 31st 2009, any excise or sales tax paid may be considered a deduction.
In 2010 as well as 2009 the American Opportunity Credit replaces the Hope Education credit. This new credit is worth $2,500 per student, this is based off the first $4,000 of qualifying educational expenses.
Homeowners that make improvements to their existing homes that are energy efficient can claim a credit of 30 percent of the cost of all of the upgrades, up to a maximum credit of $1,500. This covers things such as adding insulation, energy efficient exterior windows and energy efficient air conditioning and heating systems.
Last year was tough for many workers, and layoffs hit record levels. However, unemployment compensation is considered taxable income. But now, the first $2,400 in benefits is excluded from income.
Because of the Bicycle Commuter Act, cyclists can receive reimbursement of workplace transportation costs into a tax favored account and bikers can use the cash to put towards purchase of a bicycle, helmet, bike lock, bike parking fees and general bike maintenance.
Also, if you pay your income tax by credit or debit card, you can deduct the convenience fee that will be charged for the transaction. The card fee, as well as any other IRS approved miscellaneous deductions must exceed 2 percent of your adjusted gross income before they will count. Despite the fact that this measure limits the value of this break for many, filers with substantial expenses to claim should be sure to add the card fee.
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