Tax Changes That Could Boost Your Return
If you buy an electric car, you can claim a credit that ranges from $2,500 to $7,500. A scaled deduction is also in place to subsidize the juice needed to recharge these vehicles. Cars running on natural gas, liquefied petroleum or 85% methanol alcohol also qualify for a variety of credits.
The current year is the last for tax breaks of up to $2,400 offered for hybrid-car purchases. The deduction was designed to expire after a carmaker sells at least 60,000 of these vehicles, meaning that incentives for models by Toyota (TM), Ford (F) and Honda (HMC) are either no longer available or being phased out. Among the brands still earning a credit: Chevrolet, Dodge, GMC, Nissan (NSNAY) and Saturn.
Making Work PayThe Making Work Pay credit, part of the 2009 stimulus package, offered a tax break equal to 6.2% of pay, up to $400 for a single taxpayer and $800 for joint filers. It phases out as adjusted gross incomes exceed $75,000 ($150,000 for joint filers). The credit is often overlooked because it was added to paychecks starting in April. Those who earned more than the income limit must ensure the credit wasn't incorrectly applied and pay it back if it was. Conversely, self-employed workers should calculate and claim the credit on their filings. The IRS Schedule M is needed to correct discrepancies. Dependents The deduction allowed for each dependent has increased by $150 to $3,650. For noncustodial parents to claim a child as a dependent, they must submit a new document, the Form 8332, instead of the traditional attachments from a divorce decree or separation agreement.
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