By KEN MILANI AND CLAUDE RENSHAW
This week, TAX TALK looks at some tax law changes that were enacted this year and might have an effect on you when preparing your tax return. Ordinarily, reading about changes in the tax law would be as exciting as reading about the history of canned food, but there are some interesting goodies for almost everyone this year. Keep in mind this is merely an overview and, as you know, most tax laws come with a lot of small print and heavy lifting.
American Opportunity Credit. This credit replaces the Hope Education Credit for college expenses (tuition, books, and supplies, but not room and board) and is now equal to 100 percent of the first $2,000 and 25 percent of the next $2,000 (for a total credit of $2,500). An added new wrinkle is that the refund is 40 percent “refundable,” which means that even if you owe no tax at all, you could still get a check from Uncle Sam for 40 percent of the qualified amount. For those with children in college, this is the best news since Donny and Marie went back on tour!
Energy Credit. A 30 percent credit that is applied to the cost of qualified energy saving improvements, up to a maximum of $1,500 in total expenditures over 2009 and 2010 (maximum credit amount is $450). Among the items covered by this credit are water heaters, windows, insulation, and heating/air
