How much do we really know about tax laws? With all the recent changes, it's rather difficult to keep up with what is relevant to know for the current tax year. With 2009 came modifications in the tax law that affect us all.
One of the most important tax law changes has to do with Earned Income Credit (EIC). EIC is money back on taxes for employed people who make under a certain amount of income. In 2010, the amount of money you can get back increased, and the amount you can make and still get money back also increased. According to the IRS, if you have one qualifying child and make less than $35,463, you can get back up to $3,043. In addition, the definition of a "qualifying child" has changed as of 2010. For example, your child only qualifies if you can claim an exemption for that child. In order to get the tax credit, your must claim that child as an exemption. There are other child-related changes in the tax law, which can be found on the IRS website.
Own a business? Then it's essential to keep informed on the tax law changes that may affect you. In March 2010, for example, several provisions were put into effect under the Affordable Care Act. Take the Small Business Health Care Tax Credit, for example, which was put into effect so that small businesses could offer health insurance to employees. This tax law applies to those business owners who pay at least half of their employees' coverage. Furthermore, keep in mind that health coverage for an employee's children under 27 is now tax free.
Take advantage of other reimbursements offered under the new tax law, such as mileage. Many of us use transportation for the sake of medical reasons, and under the law, we are entitled to a 24 cents per mile reimbursement. This reimbursement also applies to deductable moves. In addition, if you are using your car for business, remember that you are entitled to a reimbursement of 55 cents per mile.
Unfortunately, the economy has left a significant portion of our population unemployed. Under the new tax law you do not have to claim up to $2,400 of your income if you collect unemployment.
These are just some of the significant tax law changes. In order to get the most for your money and understand tax logistics, make sure to keep yourself informed about changes year by year.
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