Don't Forget about the Tax Breaks Available This Year

Now that 2009 is almost over, the IRS is reminding taxpayers of some of the Tax Breaks for this year. They were made available by the American Recovery and Reinvestment Act. It provides tax incentives for different expenses you may have.

• Credit for First Time Home Buyers. The ARRA extended and expanded the first time homebuyer tax credit for 2009. If you did not own a principal residence during the past three years and purchase a house before December 1 you may receive a credit of up to $8000.00. But the purchase must close before December 1, 2009.
  
• Purchase Incentives for New Vehicles. There is a tax break to taxpayers who make a qualified purchase of a new vehicle between February 1, 2009 and January 1, 2010. You can deduct local, state, and excise taxes paid on the purchase of new vehicles. There are some limitations.
  
• Energy Efficient Home Improvements. The Recovery Act also encourages homeowners to make their homes more energy efficient. The credit is increased for homeowners who make the qualified improvements to existing homes. It is 30% of the cost of the improvements. There is a maximum amount of $1500.00.
• Tax Credit for First Four Years of College. The American opportunity credit is to help students and parents pay part of the cost of the first four years of college. The new credit modifies the existing Hope credit for 2009 and 2010, and makes it available to more people. The maximum annual credit is $2500 per student.
  

For more information on these tax incentives, go to the ARRA page of IRS.gov.