Only two things in life are certain – Taxes and Death.
Each of us starts the journey of dying on the day we are born and none of us knows the exact moment of our death. We all know the the time for taxes.
Taxes are the 3.5 months between Christmas and Summer and for most of us our tax returns need to be postmarked or electronically filed no later than April 15th of each year.
What exactly does that mean for each of the law abiding, tax paying American Citizen? Better get busy!
Taxes are a moving target. You cannot simply say I made 20K last year; how much is my refund? Its more complicated than that especially once you decide to itemize (itemize = systemactically save/catalogue every receipt throughout the year).
This post does actually have a point to it – to point out my top ten list of laws that have changed since last filing season, things that could very well affect your tax bill.
1. Three Children can now be claimed for the Earned Income Credit – Prior to 2009 you could only claim two.
2. Maximum EIC (Earned Income Credit) is now $5,657 for 3 or more qualifying children.
3. Maximum amount of money made to be eligible for EIC has increased
4. Personal Exemption amount increased to $3650 per person
5. Standard deducation for all filing statuses increased
6. NEW! Standard Deduction of Real Estate Taxes paid
7. If you bought a NEW car (must be the first owner) between February 1, 2009 and December 31, 2009 – you can deduct the sales tax you paid. If you do not itemize it can be added onto the standard deduction for your filing status.
8. Earned Income Credit increased for all categories
9. First-Time Homebuyer Credit Increased and doesn’t have to be repaid – currently there are 3 versions of this credit.
10. Making Work Pay Credit – up to $400 if single and up to $800 if MFJ
Those are my top 10 list of items that affect the majority of tax returns. Not all of them will apply to your situation and if you have any specific questions about a specific deduction then ask a qualified tax preparer.