SAN MATEO, CA--(Marketwire - March 10, 2010) - As the deadline for filing taxes grows nearer, there are many tax rule changes that taxpayers should be aware of that could net them thousands of dollars in deductions or credits. Bills.com, the leading resource for free, personalized and expert money advice, provides a rundown of the most important changes and some little known deductions that could add up to big savings.
Homebuyer Tax Credit
Through the combination of two rule changes, individuals purchasing a new home between January 1, 2009 and April 30, 2010 could be eligible for as much as $8,000 in a homebuyer tax credit. Those who have not owned a principal residence during the past three years and who purchase a new home between these dates can qualify for an $8,000 homebuyer tax credit. Those who have owned the same home as a primary residence for five consecutive years during the last eight years and who purchase a replacement home between November 6, 2009 and April 30, 2010 are eligible for up to $6,500 in a homebuyer tax credit. Note that income and other limits apply to qualify for either credit.
Energy-Efficient Home Improvement Credit
There are two primary and distinct credits for energy efficient home improvements. The first covers general home efficiency repairs, such as insulation, windows and doors, and high-efficiency furnaces. This credit is 30 percent of the cost up to an aggregate of $1,500. The second credit covers larger-ticket improvements. Homeowners can take up to 30 percent of the total cost of installing solar hot water systems, solar electric generating equipment, wind energy equipment, or geothermal heat pump systems with no fixed cap.
Government Retirees Credit
Government retirees could be eligible for a one-time 2009 refundable tax credit of up to $250 for an individual and $500 for a married couple filing jointly. To qualify, individuals must have received past government retirement benefits that were not subject to Social Security tax withholding at the time, and they must be ineligible for the $250 economic recovery payment provided to certain government program participants.
"Making Work Pay" Credit
Working individuals can claim a refundable credit in the amount of 6.2 percent of their earned income up to a maximum of $400 for a single filer or $800 for a married couple filing a joint return. Self-employed individuals and those who have not already seen an adjustment in their withholding this year will have to adjust their liability on their 2009 tax return.
Unemployment Compensation Deduction
Generally, unemployment compensation counts as taxable income. However, new rules allow for a one-year exemption for the first $2,400 of 2009 unemployment compensation.
Vehicle Sales Tax Deduction
This is a new deduction for state and local sales or excise taxes paid on the purchase of new vehicles between February 17, 2009 and December 31, 2009. This covers new cars, motor homes, light trucks and motorcycles, and is available on the first $49,500 of the vehicle purchase price even if you do not itemize deductions.
Job Search Expense Deduction
For those itemizing deductions, you may be eligible to write off expenses associated with a new job search during the last year.
Haitian Relief Donation Deduction
Congress has allowed deductions made to Haiti relief efforts between January 12th and February 28, 2010 eligible for 2009 write-offs. Qualifying contributions include those made by check, money order, credit card, charge card, debit card, or even text message. Small donations require only a cancelled check or statement, while those over $250 require a receipt from a charity.
Gambling Loss Deduction
As hard as it may be to believe, gambling losses up to the amount you've won are eligible for a deduction. These losses must be documented through a written journal, receipts or betting stubs.
For a complete list of tax changes and deductions for 2009, as well as basic filing information, visit www.irs.gov or speak with your tax preparer.
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