First-time-homebuyer tax credit:

Applies to purchase of a primary residence before Dec. 1. 2009. This fully refundable credit of up to $8,000 is available to those who purchase a home in 2009 and who have not owned a home in the previous three years. Unlike a $7,500 credit that was available in 2008, this year's 2009 credit does not have to be paid back. You can claim the new credit on your 2009 return, to be filed by April 15, 2010.   Please note, the $8,000 credit starts to phase out with incomes of between $150,000 to $170,000 for tax payers married filing jointly and single tax payers with incomes between $75,000 to $95,000.

New car sales tax deduction:

Applies to purchases of new cars between Feb. 17 2009 and Dec. 31, 2009. You may be able to deduct state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles. In states with no sales tax, you may be able to deduct other taxes and fees. You can add the deduction to the amount of your standard deduction or take it as an itemized deduction if you are not electing to take the state and local general sales tax deduction.  The deduction is phased out for joint filers with modified adjusted gross income between $250,000 and $260,000 and other taxpayers with modified AGI between $125,000 and $135,000.  If the vehicle cost more than $49,500, you can deduct the tax only up to that amount.

Cash for clunkers' rebate

Applies to vehicles that get 18 miles per gallon or less (as rated on www.fueleconomy.gov) that are traded in for the purchase or lease of a new vehicle before November 1, 2009 or when the rebate funds run out, whichever comes first. To get a rebate of up to $4,500, you must have owned your clunker (had it registered and insured) for at least a year on the trade-in date, and the car must be less than 25 years old. The dealer will apply the appropriate rebate

Property tax write-off with standard deduction

Applies to: taxpayers who don't qualify to itemize their deductions but who pay state or local real-estate taxes.

Details: You can add an amount to your standard deduction equal to the amount of property taxes paid this year, up to $500 for single filers and $1,000 for joint filers. The deduction applies to property taxes based on assessed value. Local benefit assessments for street improvements, sidewalks and sewer lines typically can't be deducted.

Sales tax deduction

Applies to: those who itemize their deductions and paid sales taxes.  If you itemize your deductions on Schedule A, you have the option of writing off either state and local income taxes or state and local sales taxes, but not both. If you opt to write off sales taxes, you can use your actual receipts to determine the total or choose to claim a standard amount using the IRS' sales tax deduction calculator. The sales tax deduction was reinstated in 2006 and has been extended through the end of 2009. It has not been extended for 2010, though there are several proposals to do so.

Education

The Tax Code includes a number of incentives to help bring down the cost of education.  The new law expands the current Hope education credit (and renames it to The American Opportunity Tax Credit).  The maximum credit has been increased to $2,500 per student, and can be claimed for expenses for the first four years of post-secondary education. The phase-out levels are $80,000 for singles and $160,000 for joint tax filers.  In a related development, the new law also permits beneficiaries of qualified tuition plans (known as “529” plans) to use tax-free distributions to pay for computer technology.  The education tax credits in the tax code are complex, please do not hesitate contacting us for more details or your tax advisor.

Making Work Pay Credit

Most corporate transferees will see an increase in their take-home pay.  The American Recovery and Reinvestment Act of 2009 allows a credit against income tax in an amount equal to the lesser of 6.20% of the tax payers earned income or $400 ($800 for married filers).  Income limitations will apply; $75,000 for singles and $150,000 for those filing their taxes married jointly.  The credit is phased out at a two percent rate above the modified adjusted gross income limit.