Taxing your brain may be worth it this year (your 2009 tax return)

Most people equate doing their annual income taxes to enduring a root canal.   We can’t say that we really blame them.  Even with some pretty cool tax preparation software out there, you still have to wrangle and organize all of those paper documents before you even get started.

OK, here are just some of the goodies that Uncle Sam setup for you for the 2009 tax year.

• First-Time Homebuyer Credit Expands. Homebuyers who purchased in 2009 can get a credit of up to $8,000 with no payback requirement. New legislation extends and expands this credit to homes purchased by April 30, 2010.

• Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes they paid or other taxes and fees they paid in states with no sales tax.

• Education benefits. The new American opportunity credit and enhanced benefits for 529 college savings plans help families and students find ways to pay higher education expenses.

American Opportunity Credit

Audio file for podcast: Education Tax Breaks

Under the American Recovery and Reinvestment Act (ARRA), more parents and students will qualify over the next two years for a tax credit, the American Opportunity Credit, to pay for college expenses.

The new credit modifies the existing Hope Credit for tax years 2009 and 2010, making the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years instead of two. Many of those eligible will qualify for the maximum annual credit of $2,500 per student.

The full credit is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above these levels. These income limits are higher than under the existing Hope and Lifetime Learning Credits.

The American Recovery and Reinvestment Act of 2009 (ARRA) also added computer technology to the list of college expenses (tuition, books, etc.) that can be paid for by a 529 plan. For 2009 and 2010, the law expands the definition of qualified higher education expenses to include expenses for computer technology and equipment or Internet access and related services to be used by the designated beneficiary of the 529 plan while enrolled at an eligible educational institution. Software designed for sports, games or hobbies does not qualify, unless it is predominantly educational in nature.

What “computer technology or equipment” refers to. This means any computer and related peripheral equipment. Related peripheral equipment is defined as any auxiliary machine (whether on-line or off-line) which is designed to be placed under the control of the central processing unit of a computer, such as a printer. This does not include equipment of a kind used primarily for amusement or entertainment. “Computer technology” also includes computer software used for educational purposes.

• Up to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals should check their tax withholding.

Tax Exemption for Unemployment Benefits in 2009

Audio file for podcast: ARRA Tax Credits

Video: Unemployment Compensation

Under the American Recovery and Reinvestment Act (ARRA), the first $2,400 of unemployment benefits an individual receives in 2009 are tax free. This provision applies only to benefits received in 2009: Normally, unemployment benefits are taxable.

Individuals who receive unemployment benefits this year should check their withholding to ensure they are not having unnecessary tax withheld. IRS News Release 2009-29 has more detail on this provision.

For the full scoop from the IRS, visit this web site http://www.irs.gov/newsroom/article/0,,id=204335,00.html?portlet=6

Disaster Charity Releif Aid – Be generous but careful as well

Leaptocheap.com wants all visitors to be generous and careful in their charitable giving.  Scams tend to pop up whenever good people step out to help those in needs.

LeapToCheap.com supports and stands behind this Charity:

Smart Giving to Help Disaster Victims

Once of the most efficient and organized charities in the world, Samaratans Purse headed by Franklin Graham was not only one of the first responders to Haiti, but they have a strong reputation for quickly analyzing what assistance organizations are providing and then precisely delivering just what is needed when it is needed (From Medical to basic needs). Please take a look at this CNN video on Samaritans Purse’s disaster response in Haiti.

Need more information?
Check our charity page that will show you how to review the statistics on the top 200 charities in the united states.

Rebates, Tax Credits & Financing for energy efficient purchases, etc.

The U.S. Department of Energy is offering some great rebates, tax credits and financing for consumers who choose energy efficient options.

For example, you may be able to get a 20% rebate on the purchase of an energy efficient appliance when you turn in your old energy hog.   So, this example alone could be a pretty good deal when you consider that you can save  on both the appliance purchase and your monthly power bills as well.

According to the Department of Energy:

Consumers can find financial assistance for energy efficient purchases and improvements in the form of tax credits, rebates, and energy-efficient financing.

Tax Credits for Energy Efficiency

Learn how you can take advantage of federal tax credits for your energy efficient purchases and improvements. For information on state and local tax credits, see State Incentives for Renewables and Efficiency.

Rebates for ENERGY STAR Appliances

Rebates for ENERGY STAR Appliances will be available from your state in late 2009 or early 2010. Find out how the program will work and how you can apply.

Energy-Efficient Mortgages and Financing

Learn about your options for energy-efficient financing programs, including mortgages to home improvement loans.