Tax law changes you MUST know about

2009 was one of the biggest years for tax law change in history. Filing this year will be more confusing and could cause many to pay money to the government that is rightfully theirs.  Roni Deutch, tax expert and author of THE TAX LADY’S GUIDE TO BEATING THE IRS: And Saving Big Bucks on Your Taxes, provided Marvelous Girl with 5 essential changes in tax law you need to know:

Newly Expanded Home Buyer Credit – If you were thinking about buying a home, get a move on! Congress approved the newly expanded homebuyer credit which counts for all homes with closing dates before April 30, 2010. First time homebuyers are eligible for up to $8,000 in refundable credit for new home purchases!

• Increased Contribution Limit for 401(k) Plans – Invest in your retirement!  The maximum employee contribution rises to $16,500 from $15,500 in 2009 for these and similar workplace retirement plans including 403(b)s and the federal Thrift Savings Plan.
• Tax Credit for College Tuition – For 2009 and 2010, the new American Opportunity credit provides up to $2,500 per student a year for four years of college, not just the first two years. It now also covers the cost of books!
• Higher Annual Gift Tax Exemption – For 2009, you can give up any individual up to $13,000 without owing any gift tax, a $1,000 increase over 2008.
• Partial Exclusion for Unemployment Benefits – While your unemployment checks are usually considered taxable income, in 2009, the first $2,400 you received will not be taxed. Simply subtract that amount from the total benefits your received (which should be reported to you on form 1099-G).