Did you claim every tax break that you were entitled to when you filed your 2009 federal tax return this year? There are so many new tax breaks that it would have been easy to miss a few. But you can set things right by filing an amended tax return now, which could put more money in your pocket in a matter of months.
Making Work Pay credit. Many taxpayers were confused by the new form used to claim the Making Work Pay credit -- a 6.2% payroll tax credit worth up to $400 for individuals and $800 for married couples. (The credit is phased out for those with high income, starting at $75,000 for single taxpayers and $150,000 for couples filing a joint return.)
Although most employees received the benefit of the credit throughout the year in the form of lower tax withholding, you had to file Schedule M to claim the credit and adjust your tax bill accordingly. But millions of people who should have filed one didn't. The IRS tried to catch the error and adjust the returns to reflect the credit, reducing the final tax bill. (You would have received a notice from the IRS if it did.) Review your 2009 tax return and, if you didn't claim the credit but are eligible for it, amend your return.
Breaks for non-itemizers. Another new form -- Schedule L -- also caused some confusion. Taxpayers who didn't itemize their deductions could use this form to claim an enhanced standard deduction for net disaster losses, sales or excise tax paid on the purchase of a new car after February 16, 2009, and a property-tax deduction of up to $500 ($1,000 for married couples filing jointly). If you missed one of those tax breaks, file an amended return.
Home buyer's credit. Another case in which you may want to file an amended return: You bought a house this year and qualify for either the $8,000 first-time home buyer's credit or the $6,500 credit for longtime owners who bought another principal residence. But you don't have to wait until you file your 2010 tax return. Special rules allow you to claim it on your 2009 return as long as you signed a binding contract before May 1, 2010, and closed on the home before Sept. 30. You'll also have to file Form 5405, "First-Time Homebuyer Credit and Repayment of the Credit," and include a copy of your settlement sheet when you file your amended return.
Education breaks. If you paid college tuition and related expenses in 2009, you had several tax breaks to choose from to offset some of those costs. Did you pick the best one for your situation? For most people, the American Opportunity Credit, worth up to $2,500 per student, was the logical choice. But if you had a freshman or sophomore who attended school in one of the seven midwestern states that were declared federal disaster areas, you might be eligible for an enhanced Hope credit worth up to $3,600 (but lower income-eligibility limits apply).