Last Updated: September 21, 2009
It might not feel like it's time to think about your 2009 tax return. But given all the recent changes to income tax laws under the American Recovery and Reinvestment Act, now is the best time to start thinking 1040s and the like.
"I wholeheartedly believe that people should take the time to learn about new aspects of our income tax law, especially those that may already affect them or give them planning opportunities, well before the end of the year," said FPA member, John Kilroy, CPA, CFP®. "A well-informed taxpayer, and his or her financial planner, could then work towards making our tax system work for them instead of the other way around."
First-time Homebuyer Credit
"It is important for a taxpayer to know, for example, that it may be possible, and preferable, to take the new first time homebuyer's credit on a 2008 return, even one that has already been filed," Kilroy said. Indeed, if you bought, or plan to buy, your first home between December 31, 2008 and December 1, 2009, you can claim a refundable credit of 10 percent of the purchase price, up to $8,000 ($4,000 if married and filing separately) on your 2009 return. Learn more about the homebuyer credit.
Earned Income Tax Credit
In addition, you should become familiar with the changes to the Earned Income Tax Credit. ARRA provides a temporary increase in the Earned Income Tax Credit for a taxpayer with three or more qualifying children, and provides additional marriage penalty relief for 2009 and 2010 tax returns. Learn more about AARA and the Earned Income Tax Credit.
Some Unemployment Benefits Tax Exempt in 2009
And lastly, if you received unemployment compensation in 2009, remember that the first $2,400 of unemployment compensation is excluded from tax. Learn more about the unemployment compensation tax exemption.
Find links to other provisions from The American Recovery and Reinvestment Act of 2009.