4. Earned income tax credit, or EITC
Workers on the other end of the income scale also get an added inflationary break. The earned income tax credit helps cut the tax bill of filers who make below a certain wage limit.The potential credit on 2009 returns ranges from $457 to $5,657.
A childless person who earned less than $13,440 in 2009 can apply for the credit. A worker who, supporting one child, made less than $35,463 is eligible, as is a worker earning less than $40,295 and taking care of two youngsters.
New for tax year 2009, the EITC amount increased for workers with a third qualifying child. Those taxpayers can claim the credit if they earned less than $43,279.
The EITC earning limits are $5,000 higher in each category for married taxpayers filing jointly.
Because the EITC is a credit, you subtract the amount directly from any tax you owe. Even better, unlike most tax credits, the EITC is refundable. That means if you qualify, you can get the money even if you owe no tax.
5. Car costs
If you used your car for business in 2009, the standard mileage rate for business use of a car, van, pickup or panel truck is 55 cents per mile.Travel for medical purposes last year is deductible on your 2009 return at 24 cents per mile. That same rate applies to allowable move-related mileage.
The mileage deduction for travel in connection with charitable services is not adjusted for inflation. It is set by law at 14 cents a mile.
In addition to these inflation adjustments to existing tax laws, there are some new ones on the books that could affect your 2009 return. See "7 new tax laws you should know."
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