Important Tax Deductions & Credits for Your Federal 2010 Tax Return

Refinancing Deductions

If you refinanced your home during 2010 and paid points as part of your costs, you can start claiming a deduction with your 2010 tax return. If you refinanced into a thirty year mortgage you will be able to deduct 1/30th of the cost paid each year that you hold onto your loan.

Home Buyer Credit

If you purchased a home during 2010 that had a signed purchase agreement before April 3oth and closed on such home no later than September 30th, then you most likely qualify for the home buyer tax credit. The maximum credit for first time home buyers is $8,000.00 where the maximum credit for all other home buyers is $6,500.00. In order to receive the credit, the home you purchased must have cost less than $800,000.00.

Home Improvement Energy Saving Credits

If you made any energy saving home improvements during 2010 you may qualify for a tax credit. The credit applies for qualifying items including skylights, windows, door leading to the outside of your home as well as high efficiency furnaces, central air conditioners and water heaters. Your tax credit will be 30% of the cost of your energy saving home improvements for a maximum credit of up to $1,500.00. It is important to note that the $1,500.00 maximum credit is for the tax years 2009 and 2010 combined. Therefore, if you already claimed a $1,500.00 energy saving tax credit in 2009, you cannot receive a credit for 2010.

Higher Education Student Expense

During tax years 2010 through 2012 the American opportunity Tax Credit is available for college students. The maximum credit allowed is $2,500.00.

Student Loan Interest Paid By Parents

If your parents are paying back your student loan, the IRS treats this like a gift and therefore you can claim the interest paid as a tax deduction as long as you are not listed as a dependent on another tax return. The maximum deduction is $2500 per year and you do not need to itemize to benefit from this deduction. Parents however do not get an interest deduction as they were not liable for the debt.

Tax Breaks For Teachers

Most teachers who work in schools spend money out of their pocket each year for classroom supplies. The IRS has extended the educator’s tax deduction and teachers will be able to continue deducting up to $250.00 each year through the end of 2011 for classroom supplies. You can claim the deduction on form 1040, so even those who do not itemize can benefit. Other educators may also qualify including teaching assistants, counselors and principals.

Sales Tax Paid Last Year

If you had to pay last year when you filed your taxes, be sure to claim the amount on your tax return. This really applies to individuals who live in states that do not have a state tax.

Earned Income Tax Credit

In 2010 this credit was opened up to more tax payers as it starts phasing out at a higher income level. An average family with three children can get a credit for $628.50.

Charitable Contributions

If you made charitable donations during the year either in cash or in goods, you can claim a deduction. Additionally, if you made food for a soup kitchen, all of your ingredients purchased are a deduction or if you did a mailing for a school fundraiser, your postage is a deduction. No matter what your donation, make sure you keep accurate receipts to back up your claim.

Jury Pay Deduction

If you served on Jury Duty during the year and you had to hand over your jury duty check to your employer, you can deduct the taxes you paid on your jury duty check. You do not need to itemize to claim this deduction.

Making Work Pay Credit

Part of a stimulus package, the work pay credit is available to anyone who files as a single and makes under $95,000 and for married couples filing jointly who make under $190,000. The maximum amount that can be claimed is $400.00 for single filers and $800.00 for joint filers