For One Year Only (So Far)

When I first started this blog I didn't expect that I would talk so much about taxes. But the trend in taxes these days seems one directional: UP. It is becoming more and more important that each of us have a handle on how we are taxed and how we can reduce our tax burdens.

Today I just want to point out the new tax benefits for 2009. If you haven't been paying close attention, these appear to be one-time events related to government stimulus efforts for the financial crisis.

Unemployment Benefits are Partially Non-Taxable
The first $2,400 of unemployment benefits received in 2009 are tax-exempt. The remainder of the benefits are taxable. This temporary tax break has not been extended to 2010.

American Opportunity Credit for Undergraduates
A new tax credit for students attending the first four-years of college. The credit is worth up to $2,500, 40% of which is refundable (meaning it can increase your tax refund even if you have zero tax liability). This new credit is more generous than the Hope Credit (which it temporarily replaces for 2009 and 2010) and the Lifetime Learning Credit (which remains available for postgraduates).


Car Sales Tax Deduction for 2009 Only
People who buy a new car, motorcycle, truck or other vehicle can deduct the entire amount of sales tax paid (up to the first $49,500 of purchase price) either as an itemized deduction or as an addition to their standard deduction. (Source: About Taxes.com)

As an aside, here's an interesting chart about tax incidence that has been making the rounds on the Web. No political statement is intended by re-publication here. I just find it interesting. (I apologize for it being a little grainy. It is in the original article as well.) From mint.com:



As always, see your financial planner or trusted tax advisor regarding these.