Tax return time will resurface soon. We’ve assembled a quick checklist of the most important and easy-to-overlook tax credits that may help your clients reduce their tax burden.
1. HIRE Act
The HIRE Act included two tax breaks for certain businesses that hired “qualified employees”: an exemption on the employer’s 6.2% share of Social Security taxes for wages paid from March 19 and December 31, 2010, and a tax credit of up to $1,000. Visit our Hire Act page for more information.
2. Health Care Reform
Although health care reform won’t take full effect until 2014, the Small Business Health Care Tax Credit begins this year. If your clients meet the requirements, they can receive a credit worth up to 35% of their qualifying premium costs. Visit Small Business Health Care Tax Credit for Small Employers IRS page or our Health Care Reform post for more information.
3. Work Opportunity Tax Credit
The list of targeted employee groups for this tax credit that can be worth up to $9,000 has expanded to include certain unemployed veterans and “disconnected youth.” These and the nine other categories of targeted employees must be hired in 2009 or 2010 to qualify. Visit http://www.irs.gov/pub/irs-pdf/f5884.pdf for the full list of targeted employees.
In addition to business tax credits, these may help your clients save on their personal returns.
4. Housing Credits
The $8,000 tax credit for first-time homebuyers and $6,500 tax credit for repeat homebuyers was extended from their original deadlines. If your clients signed binding sales contracts by April 31, 2010, and completed the home purchase by September 30, 2010, they may qualify. Visit http://www.irs.gov/newsroom/article/0,,id=204671,00.html for more information.
5. American Opportunity Credit
One of the less publicized incentives of the stimulus bill, the American Opportunity Credit provides a tax credit up to $2,500 for tuition and fees paid in 2009 and 2010 for the first four years of post-secondary education. Certain parents may claim children’s qualifying expenses for this credit. Visit http://www.irs.gov/newsroom/article/0,,id=226993,00.html for more information.