Summary of the updates of some of the 2010 tax law credits

Here are quick highlights of some of the 2010 tax law credit changes. I think they may make some of you very happy. Know that it is necessary to qualify for these credits based on a number of specific criteria. More information can be found at Internal Revenue Service

Earned Income Credit Expanded:
The credit has been expanded for larger families. As with the original credit, childless and single taxpayers may qualify for this credit as well.

Home buyer Tax Credits:
First-time home buyer tax credit has been extended to April 30, 2010. The limit of the credit remains $8,000.

Current homeowners that have lived in their home as their primary residence for a minimum of five consecutive years may qualify for a $6,500 tax credit when purchasing a new home.

Making Work Pay Tax Credit:
The changes in the tax tables may allow for bigger paychecks, however taxpayers should make sure that with the change in the tax tables, they are having enough tax taken out of their paychecks. Too little tax withheld could result in tax due on their tax return. This credit is also available to the self-employed who qualify. Self-employed individuals should calculate their withholding during the year and adjust if necessary. IRS Withholding Calculator

American Opportunity Credit:
This is a modification of the Hope Credit, allowing for higher income and adding required course materials as part of the qualifying expenses. It is now also allowing for 4 post-secondary years instead of the former two.

Sales Tax Deduction for New Vehicle Purchases:
New cars, light trucks, motor homes and motorcycles purchased between Feb. 17, 2009, through Dec. 31, 2009 may be eligible for a deduction of state and local sales and excise taxes. For those that live in a state that does not have sales tax, a deduction for other taxes and fees is provided. This deduction is not subject to itemized deductions qualification!

Residential Energy Credit:
Homeowners that make energy saving improvements to their homes may now qualify for an increase to 30% of the cost of all qualifying improvements such as energy saving windows, efficient air conditioning & heating, and the installation of insulation. The new maximum limit of the credit is $1,500 for those modifications done in 2009 and 2010.