As you prepare your 2010 federal tax forms,don’t forget to check whether you qualify for one of more TAX CREDITS!!
For example, did you engage in any activity or purchase during 2010 which improved energy efficiency?? If you did any of the following, you may be eligible for a tax credit, courtesy of the“American Recovery and Reinvestment Act of 2009”.
1) Energy Efficient Home Improvement: there is a tax credit (30% of the cost) for homeowners who made qualified energy efficient improvements to their existing homes. The maximum credit is $1,500 for improvements placed in service during 2009 and 2010, combined. Qualifying improvements include: adding insulation, energy efficient exterior windows, and/or energy-efficient heating and air conditioning systems.
2) Purchase of Alternative Residential Energy Equipment: qualifying equipment includessolar hot water heaters, solar electricity equipment, and/or wind turbines installed on (or in connection with) their home located in the US, as well as geothermal heat pump(s) installed on (or in connection with) their main home located in the US. This 30% credit runs through 2016
3) Purchase of a “Plug-in” Electric Drive Vehicle: this is for such cars purchased after Dec. 31, 2009. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500 — depending upon the battery capacity. The credit runs through 2014, but it will be phased out for each manufacturer after they sell 200,000 vehicles.
4) A variation on #3 is a specialized tax credit for two particular types of plug-in vehicles — certain low-speed electric vehicles and 2 or 3-wheeled vehicles. The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500. This credit will apply for vehicles bought after Feb. 17, 2009, and before Jan. 1, 2012.
5) Purchase of a “Conversion Kit”: this credit is 10% of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle — placed into service after Feb. 17, 2009. The maximum credit is $4,000 and will run through 2011.
6) These credits will be available even to those taxpayers who fall under the provisions of the AMT tax!
In addition to the above, there are a few other tax credits you’ll want to check out.
- The Earned Income Tax Credit: this is a refundable credit for certain people who work and have earned income from wages, self-employment or farming. Eligibility is determined by Income, age and the number of qualifying children. EITC reduces the amount of tax you owe and may also give you a refund. See “IRS Publication 596: Earned Income Credit”.
- The Child and Dependent Care Credit: this applies toexpenses paid for the care of your qualifying child(ren) under age 13, or for a disabled spouse or dependent… thereby enabling you to work (or look for work). See “IRS Publication 503: Child and Dependent Care Expenses”.
- The Child Tax Credit: this credit can be taken by those who have a qualifying child (as defined by the IRS). The maximum credit amount is $1,000/child. This credit can be claimed in addition to the credit above in #2. See details in “IRS Publication 972: Child Tax Credit”.
- The Retirement Savings Contributions Credit: this is designedto help low-to-moderate income workers save for retirement. It is also known as the “Saver’s Credit”. One qualifies if your income is below a certain limit and you contribute to an IRA or workplace retirement plan. See “IRS Publication 590: Individual Retirement Arrangements (IRAs)”.