The tax season is knocking at the door. You should know the tax breaks so that you would be able to receive it's benefits. You may get some extra tax breaks if you've bought a new home, purchased a car or if you've a college student in your family. Have a look at the available tax breaks in 2010:
Homebuyers…
All the first-time homebuyers who've bought a home after January 1st, 2009 will be eligible for a tax credit of up to $8,000. The best part is that you won't have to repay the tax credit if you live in the house for the coming 3 years. You will be able to get this benefit this year even if you close your home purchase by June 30, 2010.
If you are not a first-time buyer, you'll still be receiving certain benefits. If you are staying in your home for 5 of the last 8 years before you purchased a new house (bought after Nov. 6, 2009), you'll receive a tax credit of $6,500 for your 2009 taxes.
Homeowners facing problems…
If you've faced a short sale and the deficient loan amount was forgiven by the lender, then that amount could be held taxable by the IRS. It would be considered as your income. However, there are certain exemptions in this regard. If your mortgage company forgives up to $2 million in debt on your primary home, you can exclude this from your income. However, you can get this benefit if the sale of the property took place between Jan. 1, 2007, and Dec. 31, 2011.
Benefits for unemployed…
There is a tax-free unemployment compensation of $2,400 which is applicable for 2009 only. However, the health insurance premiums which you're paying for the continuation of your coverage under COBRA, is not tax deductible. If you take them as a part of a medical expense deduction and get your taxes itemized, then you can have them deducted.
Car buyers…
The cash-for-clunkers payment (also known as Car Allowance Rebate System, it offers $3,500 - $4,500 to people who trade in an old car for a new one which has higher fuel economy.) is not taxable.
College students…
Households with students in college will receive the new American Opportunity Tax Credit worth up to $2,500. Also, 40% of that amount is refundable. The best part is that all those who owe no taxes can get a refund of up to $1,000 for each eligible student.