| Make Work Pay | | | | cap." |
| There are a lot of misconceptions going around | | | | Automobile Breaks |
| regarding the new Making Work Pay credit. In | | | | Although many hybrid vehicle tax credits are |
| order to benefit fully, it is important to understand | | | | beginning to expire, there are plenty of new ones |
| how you can take advantage of the credit. The | | | | being announced. The IRS just released new |
| most common myth is that the credit will be | | | | information on the new tax credits being made |
| delivered to qualifying taxpayers through the mail, | | | | possible by the Emergency Economic Stabilization |
| similarly to the stimulus check last year. However, | | | | Act of 2008 and the American Recovery and |
| it is actually distributed through a taxpayer's check | | | | Reinvestment Act of 2009. The credits apply to |
| in the form of a reduced tax rate. Because of | | | | low speed electric vehicles, as well as cars with at |
| this, it is your job to check you paychecks and | | | | least four wheels that draw propulsion using a |
| make sure the amount is being added (note that | | | | rechargeable battery. Depending on the height and |
| you may need to adjust your withholding to | | | | weight of the vehicle the value of the credit can |
| reflect the change). | | | | range from $2,500 to $15,000. |
| The First Time Homebuyer Credit | | | | Flood Victims |
| A lot of people are talking about the federal | | | | The IRS unveiled some new tax law changes to |
| government's credit for people to purchase a | | | | assist flood victims this year. One big win for |
| home in the 2009 tax year. However, it is | | | | flood victims was the removal of some loss |
| important to remember that the credit is only | | | | limitations. Whereas in 2008, flood victims could |
| available to first time homebuyers. To be more | | | | only claim a certain amount of losses, now they |
| specific, the IRS defines a new homebuyer as a | | | | can deduct the entire amount. However, it is |
| person who has not owned a principal residence | | | | important to remember that this full amount can |
| during the three-year period prior to the purchase. | | | | only claimed by taxpayers who itemize their |
| The IRS also specifies that you need to purchase | | | | deductions. Another less popular tax law change |
| the home between January 1 to December 31, | | | | affects individuals who helped victims displaced |
| 2009. For more information, check out the IRS' | | | | from their homes. According to the IRS these |
| press release titled "First-Time Homebuyers Have | | | | charitable taxpayers can claim an additional |
| Several Options to Maximize New Tax Credit." | | | | exemption of $500 for each displaced individual |
| Energy Conservation Credit | | | | they help, with a maximum of $2,000. |
| For those of you hoping to upgrade some of | | | | Unemployment |
| your appliances this year, the IRS is giving you | | | | With more and more Americans losing their jobs, |
| even more incentive to go "green." If you make | | | | changes have also been made to the way |
| an energy efficient upgrade to your home-such | | | | unemployment benefits are taxed. The key to |
| as installing double-paned windows or buying an | | | | benefiting from these new changes is by knowing |
| approved washer and dryer-you can take a | | | | exactly what you are entitled to. According to the |
| deduction for up to $1,500. However, you must | | | | newest changes to the tax law, the first $2,400 |
| divide the deduction between the 2009 and 2010 | | | | worth of unemployment benefits is income tax |
| tax years, so you will only be able to claim $750 | | | | free. Therefore, you could expect an increase on |
| this year. Please note that according to | | | | each check you receive by around $25. |
| EnergyStar.gov, "geothermal heat pumps, solar | | | | Additionally, 20 more days have been added to |
| water heaters, solar panels, fuel cells, and small | | | | the duration of unemployment. |
| wind energy systems... are not subject to this | | | | |