Its Tax Season: Need help with your refund?
Written by Ali Lawrence |
The question of the tax season is: How do I increase my refund for tax year 2009? The answer? Based on the myriad of tax law changes, it is highly likely that you will get a bigger refund this year. The Internal Revenue Service (IRS) has made changes that affect from students to small business owners to single individuals. And as if that is not good enough news already, there is even an Economic Recovery Payment. The good news follows.
-Education: The American Opportunity Tax credit modifies the Hope Credit and is up to $2,500 per student. The AGI limit is $90,000 (gradually reduced from $80,000 upwards) and can now be claimed for four years (Hope credit had a limit of first two years) of post-secondary study. You can now claim books, supplies, and equipment as part of your education cost.
-Children: You’ll be happy you housed, fed, and clothed them for a whole year because the Earned Income credit has increased: $3,043 for one, $5,028 for two, and $5,657 for three. And even if you are childless you qualify for $457. AGI limits range from $13,440 to $43,279. To claim the Additional Child Tax credit income must exceed $3000 (also carries over into 2010).
-Small Business: If 50% or more of your income was derived from a business with fewer than 500 employees and your AGI is less than $500,000, then you qualify for less tax payments as compared to 2008. You can choose to calculate your tax total based on 2008 filing or 2009 numbers.
Unemployment: Recipients of state unemployment benefits are allowed to reduce computation of gross income by $2400.
Residential/Home: The Residential Energy Efficient Property credit removes the limitation on the credit amount that can be claimed for qualified energy upgrades to your home such as solar electric or water and geothermal heat equipment. A business credit is also available. The First-time Homebuyer credit has been extended to April 30, 2010. Income limits apply and the purchase price cap is $800,000.
Charity: You can claim donations towards Haiti Relief on your 2009 return
Fees: Convenience fees charged by credit card companies associated with your payment of income tax can be deducted. It can only be claimed in the year the fees were charged.
Your 2009 return holds great potential. Be sure to claim all credits and deductions for which you qualify. According to H & R Block, the most often overlooked tax credits and deductions are the Earned Income, Education, and Child credits. Don’t be a sad-tistic!
Visit the IRS website for more detailed information on tax changes.
Sources:
“Tax Changes 2009.” Internal revenue Service. Web. 05 Feb. 2010. <http://www.irs.gov/formspubs/content/0,,id=178012,00.html>.
"Tax - Overlooked Tax Credits & Tax Deductions." H&R Block. Web. 05 Feb. 2010. <http://www.hrblock.com/taxes/tax_tips/deductions_credits/overpayingtaxes.html?ttiptitle=Overlooked%20Credits%20%26%20Deductions>.
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