April 15th is just around the corner but if you’re like me, your taxes have been filed and refunds (or payments) have been processed. However, not everyone is as enthusiastic about taxes as I am so I’m sure there are still millions of Americans waiting to file their taxes. A new tool available on the White House website may help Americans boost their refunds or decrease their taxes owed – the Recovery Act Tax Savings Tool.
The interactive tool allows consumers to determine which Recovery Act-related tax incentives for which they may qualify. Although I’ve already filed my taxes, I took a few minutes to go through the eight-question tool to see if I’ve missed anything.
The first question is your filing status – this will help the tool tailor their recommendations to your filing status. After inputting your filing status you need to enter your estimated 2009 family income. Depending on your income, you may be eligible for the Making Work Pay Tax Credit. The government estimates that 110 million Americans will qualify for this tax credit, which is good for $400 for individuals and $800 for married couples. Single filers making less than $95,000 and married couples making less than $190,000 are eligible for this credit.
If you paid for college expenses for yourself or your children, you may qualify for a $2,500 American Opportunity Credit for college expenses. The income thresholds are $90,000 for individuals and $180,000 for married couples.
First-time homebuyers can qualify for an $8,000 First-Time Homebuyer Tax Credit. Income limits are $95,000 for singles and $170,000 for married couples. This credit was extended so if you are in the market for a new home and can sign a contract by April 30, 2010 and close by June 30, 2010, you can still qualify for this tax credit. An additional $6,500 tax credit is available for some existing homeowners that purchase a new primary residence.
The Recovery Act Energy Efficiency and Renewable Energy Incentives allow homeowners to receive a tax credit for 30 percent of an energy efficient upgrade, up to $1,500. For more details on qualifying products, read Green tax incentives for consumers.
The Recovery Act also allows for a sales tax deduction for new vehicles purchased between February 17, 209 and December 31, 2009. The income phase outs for this credit are much higher than the others - $135,000 for individuals and $260,000 for married couples.
The next question the tool covers deals with unemployment benefits. The government estimates that more than 20 million Americans received unemployment benefits in 2009. Thanks to the Recovery Act, the first $2,400 in unemployment benefits is tax-free.
The final tax situation addressed in the tool is families with dependent children. Eligible families can claim the Child Tax Credit, which is up to $1,000 per child. Income phase outs are much lower than some of the other credits - $55,000 for single filers, $75,000 for married couples filing separately, and $110,000 for married couples filing jointly.
After going through the Recovery Act Tax Savings Tool I realized that I claimed every tax credit that I was eligible for. It also helped to prepare me for my 2010 taxes as some of these tax credits have been extended – most notably the credit for energy efficiency upgrades. I recently installed a brand new high efficiency cooling and heating system in my home. I’m looking forward to the lower utility bills during the hot Arizona summer but I’m also looking forward to the $1,500 tax credit on my 2010 taxes.