Five Tax Credits to Take

By Greenstein Rogoff Olsen & Co., LLP
Posted: 3/12/2010

There is a common phrase that states, “Nothing in life is free.” This may be true, but there are tax credits you can take to help save money when filing your tax return.

Credit #1-First Time Home Buyer Credit

The first time home buyer credit has been extended to cover homes purchased between January 1, 2009 and April 30, 2010. Taxpayers can receive a maximum credit of $8000 if they purchased a home for the first time during this time period. The credit does not have to be paid back unless the home is no longer the tax payer’s main residence within a three year period. The credit has now been extended to cover homes purchased until April 30, 2010. There are phase out levels dependent upon the adjusted gross income (AGI) of the taxpayer. There is also a home buyer credit for existing home owners. For more information on income limits or the credit please see http://www.groco.com/readingroom/real_homebuyer_credit.aspx.

Credit #2-Lifetime Learning Credit

College enrollment has increased since the downturn of the economy. The lifetime learning credit allows individuals who are paying college tuition to receive a credit for qualified tuition and related expenses. With this credit, taxpayers can receive back 20% of qualified out-of-pocket education expenses up to $2000. To qualify for the credit, your modified adjusted gross income (MAGI) must be less than $60,000 if you are a single filer. If you are married filing jointly your MAGI must be less than $120,000 to qualify. Those who are married, but filing separately do not qualify for the tax credit. For more information regarding this credit, please see http://www.irs.gov/publications/p970/ch04.html#en_US_publink1000178153.

Credit #3- Making Work Pay Credit

The government has passed the American Recovery and Reinvestment Act of 2009. This act allows for the “Making Work Pay” tax credit. With this credit, tax payers can receive up to $400 for working individuals and $800 for working families. For most, the credit will automatically be received as the amount will be withheld from employees paychecks. However, if the credit is not automatically received, individuals can claim the credit on their income tax return. The credit is phased out for taxpayers with an AGI of over $75,000.

Credit #4 -Energy Efficient Home Improvements

The government has created several “green incentives” with their energy efficiency tax credits. If you made changes to your existing homes in 2009 that include one of energy efficient changes below, you can claim a tax credit of up to $1,500. Changes may include:

• Adding insulation
• Installing energy efficient heating and air conditioning
• Installing energy efficient windows and doors

Also, if you installed qualified solar heating energy systems, you can deduct up to 30% of the costs for installation.

Credit #5-Unemployment Benefits Credit

If you received unemployment benefits in 2009, you can get a tax credit. The first $2400 that you received in benefits for 2009 is not taxable.

If you qualify for any of these tax credits, you may save yourself quite a bit of money. If you need help with claiming the credits on your tax return, you can seek professional assistance. Feel free to contact our office at 510-797-8661 or by clicking on the link http://www.groco.com/company/contact.aspx.