In 2009, The American recovery and reinvestment act was signed, creating several new tax credits and tax deductions. These credits and deductions will help out millions of Americans this Tax filing season by reducing their tax burden and even directly lowering the amount of taxes that they pay. This act created new tax credits for homebuyers such as the federal housing tax credit, which allows first time home buyers and move-up buyers that opportunity to claim a pretty nice credit on their taxes. The energy star tax credit was also created which allows home owners to deduct up to 30% of the cost of new energy products such as windows, doors, Hvac systems, Biomass stoves, insulation, roofs and many others. This credit is available with certain restrictions and requirements.

One credit that is not so new is the earned income tax credit. With the earned income tax credit, Individuals or couples can claim a credit up to several thousands of dollars if they earn a certain income level. With the earned income credit, the amount that you receive increases as the number of qualifying children that you have increases. There are four different amounts that are given for the earned income tax credit. The four credit amounts correspond to the number of children that you have. Your tax credit will be the largest if you have three or more children and will be the smallest if you have no qualifying children at all.
The American opportunity tax credit is an extension of the hope tax credit and offers a credit for up to $2,500 for you, your spouse, or a qualifying child. You may be able to receive multiple credits for each qualified student. The tax credit can be used for tuition and other school related expenses. In order to qualify, you can’t have any felony convictions and must have been enrolled in school at least half time last year.
There are several tax credits for the 2009 tax year that can greatly reduce the amount of taxes that you pay. The best possible way to lower the amount that you pay in taxes is by hiring a quality tax accountant that is up-to-date with all of the latest tax laws. A tax accountant can lower your taxes by understanding your financial situation and offering ideas that will save you money. If you are not able to hire a tax accountant, you may want to check out a tax preparation software program. These programs can often catch mistakes and suggest tax credits and deductions that you may have not been aware of.
Author: Abdullah Patel