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Whenever Congress authorizes a new tax credit, there is always a lot of press coverage about it – and for good reason. Tax credits can greatly reduce the amount of tax that you owe to the Internal Revenue Service (IRS). Tax credits allow those eligible for them to deduct the amount of the credit directly from the amount owed to the IRS; they are generally much more valuable than tax deductions, and are available to a taxpayer regardless of income tax rate bracket.
New Tax Credits
2009 has seen quite a few new tax credits passed by Congress, and there is probably one that affects you somewhere. The problems caused by the sub-prime mortgage lending crisis - coupled with sharp rises in unemployment and the cost-of-living - have motivated Congress to pass an abundance of new legislation regarding personal tax credits. These new tax credits have been created in order to stimulate the economy, and help Americans recover financially, during the current recession.
In order to help the depressed housing market in the United States, Congress authorized a tax credit of up to $8000 for first-time homebuyers. Taxpayers eligible for this credit simply need to have purchased their first principal residence on or after January 1, 2009 and before 2000 December 1, 2009. The tax credit is deducted directly from the amount of tax owed to the IRS, and can result in substantial tax savings. In many cases, the credit might actually result in no taxes whatsoever being owed.
Another new tax credit took effect on January 1, 2009 and was created to motivate car buyers towards purchasing energy-efficient plug-in hybrid cars. For consumers who purchase a plug-in hybrid car, Congress has authorized a tax credit of between $2500 and $7500. The effect of this tax credit could directly offset the cost of the car by the corresponding amount of the tax credit - depending on the amount of tax owed by the taxpayer.
Another federal tax credit that has the potential to benefit many taxpayers is the American Opportunity Tax Credit of 2009 that offers a tax credit toward the cost of college tuition and continuing education. This tax credit is actually a modification of the older HOPE Education Tax Credit; however, it has been greatly expanded to include people in higher tax brackets and married couples the file jointly. If you or your dependent is in college or taking continuing education classes, then this tax credit could save you up to $2500 off of your tax liability to the IRS.
Other New Tax Credit Considerations
There are numerous other new tax credits that have been authorized Congress within the last 12 to 18 months, and many will result in saving countless Americans thousands of dollars in income tax liabilities and payments. In the current economic situation, the use of federal tax credits can help ease the burden of increasing food prices and higher interest payments.
In order to find out which tax credits you may be eligible for, you should visit the IRS website at www.IRS.gov. On their website, the IRS has many guides and publications that will assist you in determining which tax credits you may be eligible for. If you have not used tax credits in the past, to offset the amount of tax liability that you owe to the IRS, then you should definitely visit the IRS website and research tax credits that may be available to you.
New Tax Credits
2009 has seen quite a few new tax credits passed by Congress, and there is probably one that affects you somewhere. The problems caused by the sub-prime mortgage lending crisis - coupled with sharp rises in unemployment and the cost-of-living - have motivated Congress to pass an abundance of new legislation regarding personal tax credits. These new tax credits have been created in order to stimulate the economy, and help Americans recover financially, during the current recession.
In order to help the depressed housing market in the United States, Congress authorized a tax credit of up to $8000 for first-time homebuyers. Taxpayers eligible for this credit simply need to have purchased their first principal residence on or after January 1, 2009 and before 2000 December 1, 2009. The tax credit is deducted directly from the amount of tax owed to the IRS, and can result in substantial tax savings. In many cases, the credit might actually result in no taxes whatsoever being owed.
Another new tax credit took effect on January 1, 2009 and was created to motivate car buyers towards purchasing energy-efficient plug-in hybrid cars. For consumers who purchase a plug-in hybrid car, Congress has authorized a tax credit of between $2500 and $7500. The effect of this tax credit could directly offset the cost of the car by the corresponding amount of the tax credit - depending on the amount of tax owed by the taxpayer.
Another federal tax credit that has the potential to benefit many taxpayers is the American Opportunity Tax Credit of 2009 that offers a tax credit toward the cost of college tuition and continuing education. This tax credit is actually a modification of the older HOPE Education Tax Credit; however, it has been greatly expanded to include people in higher tax brackets and married couples the file jointly. If you or your dependent is in college or taking continuing education classes, then this tax credit could save you up to $2500 off of your tax liability to the IRS.
Other New Tax Credit Considerations
There are numerous other new tax credits that have been authorized Congress within the last 12 to 18 months, and many will result in saving countless Americans thousands of dollars in income tax liabilities and payments. In the current economic situation, the use of federal tax credits can help ease the burden of increasing food prices and higher interest payments.
In order to find out which tax credits you may be eligible for, you should visit the IRS website at www.IRS.gov. On their website, the IRS has many guides and publications that will assist you in determining which tax credits you may be eligible for. If you have not used tax credits in the past, to offset the amount of tax liability that you owe to the IRS, then you should definitely visit the IRS website and research tax credits that may be available to you.
