President Obama's Weekly Address: Relief for the Middle Class at Tax TimeApril 10, 2010
As April 15th approaches, the President discusses several of the tax breaks for middle class families he has signed into law. Excerpts:
"So far, Americans who have filed their taxes have discovered that the average refund is up nearly ten percent this year – to an all-time high of about $3,000. This is due in large part to the Recovery Act. In fact, one-third of the Recovery Act was made up of tax cuts – tax cuts that have already provided more than $160 billion in relief for families and businesses, and nearly $100 billion of that directly into the pockets of working Americans."
". . .I kept a promise I made when I campaigned for this office and cut taxes for 95 percent of working Americans. For most Americans, this Making Work Pay tax credit began showing up in your paychecks last April. And it continues this year, for a total of $400 per individual and $800 per couple, per year."
". . . because a college education is critical to the success of our workers and our economy, we’re helping to make it more affordable for millions of Americans. Millions of students and parents paying for college tuition are now eligible for up to $2,500 under the American Opportunity Credit. Along with a host of other steps we’ve taken, this will help us reach our goal of once again having the highest proportion of college graduates in the world by 2020. "
". . . we’re restoring the home as a source of stability and an anchor of the American Dream. If you’ve bought a home for the first time, you’re eligible for a credit of up to $8,000. And if you bought a new car last year, you can deduct the state and local sales taxes you paid on that car."
". . . whether you bought a home for the first time or you’ve owned one for a long time, if you invested in making your home more energy-efficient with certain improvements like new insulation or windows, or plan to this year, you’re eligible for up to $1,500 in new tax credits. This does more than just put money back in your pocket; it’s helping create new clean energy, manufacturing, and construction jobs at small businesses across the country."
". . . to help working families with children through difficult times, we increased the Earned Income Tax Credit and allowed more families to qualify for the Child Tax Credit."
". . . for those who lost their jobs in the recession and need some help getting back on their feet, we provided a 65 percent tax credit to help cover the cost of health care and made sure the first $2,400 in unemployment benefits is tax-free."
These are among the tax breaks and savings that are available to over one hundred million Americans right now. It’s also important to note that the new health reform law includes the largest middle class tax cut for health care in history, and once it’s implemented; millions of Americans will finally be able to purchase quality, affordable care and the security and peace of mind that comes with it. And one thing we have not done is raise income taxes on families making less than $250,000. That’s another promise we’ve kept . . .
read more:
http://www.whitehouse.gov/the-press-office/weekly-address-recovery-act-benefiting-american-families-during-tax-season____________________
Besides an up to $8,000 deduction for first-time homebuyers and up to $2,500 for college expenses, taxpayers can also deduct up to $1,500 for making energy-efficiency improvements to homes. And state and local taxes can be deducted for new vehicles bought between Feb. 17 and Dec. 31 of last year.
For parents, the child tax credit has been expanded, providing $1,000 for each child under 17.
RECOVERY ACT TAX RELIEF
Major Tax BenefitsTaxpayers can collect on more than a dozen 2009 Recovery Act tax benefits when they file their 2009 tax returns, including:
Making Work Pay - Ninety-five percent of working families are receiving the Recovery Act’s Making Work Pay tax credit of $400 for an individual or $800 for married couples filing jointly in their paychecks in 2009 – and will continue to in 2010.
* Taxpayers whose withholding in 2009 did not provide the full amount of the credit they are due will get the additional amount when they file their 2009 tax return. Even though most taxpayers received the benefit of this credit in their paychecks from adjusted tax withholding by their employers, they still need to claim this credit on their tax returns (i.e., Form 1040 or 1040A).
Up to $2,500 in College Expenses – Families and students are eligible for up to $2,500 in tax savings under the American Opportunity Credit as well as enhanced benefits under 529 college savings plans, which help families and students pay for college expenses.
* American Opportunity Credit – More parents and students are eligible for a tax credit of up to $2,500 to pay for college expenses and can claim the credit annually for four years instead of two.
* 529 College Savings Plans – Students can now use a 529 plan to pay for computer technology, adding this to the list of traditional college expenses (tuition, books, etc.) that can be paid for by a 529 plan.
Up to $8,000 for Purchase of First Home – Homebuyers can get a credit of up to $8,000 for first homes purchased by April 30, 2010 under the First Time Homebuyer tax credit. Long-time residents who don’t qualify as first-time homebuyers and those with incomes of up to $145,000 for an individual and $245,000 for joint filers are also eligible for a reduced credit.
Up to $1,500 in Energy Efficiency and Renewable Energy Incentives – Taxpayers are eligible for up to $1,500 in tax credits for making some energy-efficiency improvements to their homes such as adding insulation and installing energy efficient windows.
Money Back for New Vehicle Purchases – Taxpayers can deduct the state and local sales taxes they paid for new vehicles purchased from Feb. 17, 2009 through Dec. 31, 2009 under the vehicle sales tax deduction. In states that don't have a sales tax, some other taxes or fees paid may be deducted.
Expanded Family Tax Credits - Moderate income families with children may be eligible for an increase in the Earned Income Tax Credit and the additional Child Tax Credit.
* Earned Income Tax Credit – The Recovery Act increased the credit for families with three or more children, bringing the maximum amount to $5,657.
* Child Tax Credit – More families will be able to take advantage of the child tax credit under the Recovery Act, which reduced the minimum amount of earned income used to calculate the additional child tax credit to $3,000 from $12,550.
Up to $2,400 in Unemployment Benefits Tax Free in 2009 – Unemployment benefits are normally taxable, but the Recovery Act made the first $2,400 of unemployment benefits received in 2009 tax free.
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Find out more about the Making Work Pay tax credit, breaks for first-time homebuyers, rewards for making your home more energy efficient and more through the WH's 'Tax Savings Tool'. April 10, 2010
Press Briefing by Administration Officials on Recovery Act Tax Credits Available to American Families
http://www.whitehouse.gov/the-press-office/press-briefing-administration-officials-recovery-act-tax-credits-available-american
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