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Federal Tax Credits Abound and Rebound
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Homebuyer and homeowner tax credits
After President Obama signs the bill, the first-time homebuyer tax credit of "up to" $8000 is expected to be extended. A new "current homeowner" tax incentive of "up to" $6500 is expected to be offered to those who want to buy a new home by April 2010. The following website will shed further light on the subject:
http://www.newsday.com/long-island/nassau/obama-expected-to-extend-expand-home-tax-credit-1.1569795
Electric car tax credits
In addition, don't forget the electric car and conversions kit tax incentives that expire in 2012 (ranges from $2500 to $7500 depending on the car's battery capacity, weight and other similar items). Specific timeframes do apply separately to each of these tax credits. Check the following website for possible qualifiers. http://www.ecobusinesslinks.com/electric_car_manufacturers.htm
What's the difference between tax credits and tax deductions
Tax deductions merely reduce the amount of income that is taxed; whereas, tax credits--those golden incentives--reduce the amount of tax due AFTER all the deductions have been taken. A much better offer, but don't take deductions lightly. Both are important in managing taxes.
Tax credits despite the pronounced amounts are "up to" in most cases. This means that if there is an $8000 tax credit on something but you only owe $6000 in taxes, you should NOT expect that the $2000 difference will be sent to you. The only credit I am aware of that gives you more than you put in is the Earned Income Tax Credit which I will not be talking about here. INSTEAD, you simply won't owe any taxes for that year if your 1040 is correct.
For information on the above tax credits and others offered by IRS, go to the following website:
http://www.irs.gov/newsroom/article/0,,id=204335,00.html?portlet=6
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