New deductions and credits for 2009 tax year

Here’s a handy list of ten new deductions and credits for this year’s taxes from Thomson Reuters.

From the link, numbers four and five — one for the employed and one for the unemployed:

4. Making work pay credit. Income tax withholding was reduced during 2009 to reflect the new making work pay credit, which slashes tax liabilities by up to $400 ($800 on a joint return). “Employers had to shoulder all the work of the withholding adjustment, but employees now need to claim the credit on their tax returns in order to hold on to that extra take-home pay,” Scharin explains. Tricky aspects of this credit arise from the eligibility rules; some folks whose withholding was reduced are not actually eligible for the credit. Ineligibility could arise because the credit phases out in the MAGI range of $75,000 to $95,000 ($150,000 to $190,000 for joint returns).

5. Unemployment compensation. Up to $2,400 of unemployment compensation benefits are completely tax-free in 2009. “These benefits are not included in your adjusted gross income, and that could help you to qualify for other tax benefits that have AGI restrictions,” Scharin points out.