New tax changes could hurt or help you - WTVM.com-Columbus, GA News Weather & Sports

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New tax changes could hurt or help you

By Zaneta Lowe  - bio | email | Twitter

COLUMBUS, GA (WTVM) - Sure, April 15th is more than six months away, but experts say now's the time to consider tax changes that could either cost you or help you save money in the end.

First to consider, there are changes on the job and off.  There's of course the Making Work Pay credit, which should be handled by your employer.

"If not, they'll get it at the end of the year when they file their tax return. That is applicable for 2009, 2010," explains Certified Public Accountant Clinton Gilmore of Robinson and Grimes.

Also, the first $2400 dollars of unemployment benefits received in 2009 is tax free.

The law also helps terminated workers pay for continuing health insurance.  It's 65% for up to nine months.

"Essentially if somebody's involuntarily terminated, the COBRA payments for their insurance has to be paid and in order for them to receive those benefits, the government has agreed to subsidize some of those premium payments," says Gilmore.

On another note, there's help for homeowners this year too.  There's the federal credit for first time home buyers.

"If you're looking at buying a home now, the new credit is available for the lesser value 10% of the value of the home or $8,000."  There's also a credit for Georgia residents.

Plus, there's a new provision that allows homeowners who normally don't itemize to deduct real estate taxes up to $500.

Gilmore also says pay close attention to credits for college students.

"Basically, you can take an above the line deduction which is a new deduction up to $4,000 for higher education expenses or you take a credit."

Plus, 529 plans can be tapped tax free to pay for computers.

Another big one, there are changes for both the child tax credit and the earned income credit that could benefit more lower income taxpayers

Gilmore also says there are some adjustments that military personnel should take a look at.

"There's some provisions that allow military personnel to elect some of their combat pay to be earned income and take advantage of some of this earned income credit."

Plus, members of the military can tap into retirement accounts penalty free if called to serve active duty for more than 180 days.

Gilmore also adds, "Just be careful on all these tax provisions to consult your tax advisor because there's limitations, phase outs, some specifics that aren't really talked when you hear it on the street."



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