I know that even the mention of taxes may be sending chills down your spine. And I will note that I AM NOT A TAX PROFESSIONAL. So, just in case you think I am an undercover tax accountant or other professional in the tax field, I am not, but I’m a mom who has to pay taxes and I too have to go through the quagmire of tax mumbo jumbo.
2010 is a fascinating year for tax payers as there are a few new things that have the IRS scrambling, thanks to our Presidential administration, if you don’t already know about some of these tax breaks, you will be very happy if you are an adoptive parent, a person who just “greened” your home, purchased an electric car or recently purchased a home for the first time.
NEW HOME BUYER CREDIT
This information is from the IRS.gov website states that if you bought your home as a first time home buyer in 2008, 2009 or up until September 2009 as your primary residence you are eligible for a credit up to $8,000 which will either reduce the amount you owe in taxes, or increase your refund as the credit is refundable after all tax liability is reduced. The only downside to this credit is, if you altered (structurally) or sold your home (2008-2010) then you will have to repay a portion of your credit.
ADOPTION TAX CREDIT/REFUND
http://www.irs.gov/newsroom/article/0,,id=220809,00.html
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If you expanded your family through adoption in 2010 (or in the last 5 years) you are eligible for an adoption tax credit that is NOW refundable thanks to Obama’s Affordable Care Act. What this means to adoptive parents who adopted children between the years of 2005 to 2010 is that the adoption credit amount from the adopting year ($10,000 to $13,130) is now fully refundable. This credit includes all adoption related expenses (lawyer fees, travel, lodging, filing fees) for a domestic or foreign adoption of a minor child under the age of 18. The credit is also refundable for a special needs adoption (sibling group, older child, child of a minority ethnicity or from adverse family history), which is any child adopted through the state who receives AAP (adoption assistance payments) through the federal government on a monthly basis to care for their special needs child, will get the FULL AMOUNT REFUNDED.
ENERGY EFFICIENCY TAX CREDIT
If you purchased energy saving appliances (which are federally approved) made energy efficient modifications to your home (ie, solar water heater, energy efficient windows, energy efficient cooling and heating systems) then you are eligible for a credit of 30% of the expense paid for those items. Also if you purchased an electric car, you are eligible for up to $7,500 in tax credits. Look at the link above to see if you qualify for any of these credits.
DEDUCTION FOR HIGHER EDUCATION EXPENSES
http://www.irs.gov/publications/p970/ch06.html
You can claim this tax credit if your self, your spouse (if married) or your dependent paid tuition for higher education. Each tax payer who qualifies can deduct up to $4,000 from their tax liability to cover tuition and qualified higher education expenses.
FREE OR MODERATELY PRICED ONLINE TAX WEBSITES
So, you have all of your tax papers, credits and stuff and are ready to get started. Well, you can pay an accountant to do your taxes for you or you can use one of these easy tax websites that offer, step by step online software that will guide you easily through your tax return.
My personal favorite is TURBO TAX online as they claim to give get the biggest tax return and in my estimation they are the easiest to use.
The software platform walks you through your return, step by step.
Another good online tax service is HR BLOCK online. Again this is a software platform that walks you through your return and finds all of your eligible deductions, credits and claims. Both Turbo Tax and HR Block give help you do both your federal and state taxes and will file them for you through their website. For an additional fee you can also purchase audit support from both tax companies.
JACKSON HEWITT also has an online services that guides you through your tax preparation and helps you file online.
