Benefit from New Tax Credits Now
Don’t wait for next year’s refund. Change your withholding to boost your pay now.

There are several new tax credits for 2009, and if you can take advantage of them, you’ll lower your tax bill. But why wait until next spring to collect a tax refund? If you adjust your withholding for the last paychecks you receive in 2009, you can start enjoying a bigger paycheck right away. The same strategy applies if your personal situation has changed this year -- by getting married, for example, or having a baby. You can adjust your withholding by increasing or decreasing the number of allowances you claim on Form W-4. The more allowances claimed, the lower the tax withholding from each paycheck.
Say you bought a home this year. Tax-deductible expenses, such as mortgage interest and property taxes, will boost your deductions and your withholding. Or maybe you’re an older homeowner who has paid off your mortgage but will benefit from the extra standard deduction available to homeowners this year who don’t itemize. It’s worth up to $500 for individuals and up to $1,000 for married couples in 2009. Consider adjusting your tax withholding now to account for these added tax breaks by filing a new W-4 with your employer to make sure the right amount of taxes are being withheld from your paycheck.
However, if you qualify for the new tax credit for first-time home buyers, worth up to $8,000, or an even newer credit available to longtime homeowners who buy a new home on or after November 7, 2009, worth $6,500 (see FAQs on the Home Buyer's Credits), don’t bother adjusting your withholding for 2009. There’s an even faster way to get your money: A special provision allows you to amend your 2008 tax return (even if you bought the house in 2009) and get a refund in a matter of weeks.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
If you, your spouse or one or more dependent children are eligible for the newly expanded American Opportunity tax credit, which provides $2,500 per student to offset tuition and other qualified costs during the first four years of college, consider adjusting your withholding now. Or if you got married, had a baby or adopted a child in 2009, you’re entitled to a personal exemption worth $3,650 for each member of your expanded family.
Finally, if you bought a new car between February 17 and December 31, 2009, you may be able to deduct the state and local sales tax you paid on any vehicle costing up to $49,500, whether you itemize your deductions or not. The income eligibility limits are generous—up to $135,000 for individuals and $260,000 for married couples filing jointly. Depending on how much you paid in sales taxes, it might be enough to warrant adjusting your withholding.
Rather than sharpening your pencil and tackling the worksheets that accompany the W-4 instructions, take the easy way out: We havean an online calculator that’s quick and simple to use.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Travel trends you can expect this summer
The Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
Ten Cheapest Places To Live in New York
Property Tax If you’re planning a move in New York, here are the counties with the lowest property tax bills in the Empire State.
-
‘My Etsy Shop is Dead’: Vendors Cry for Help Amid Trump’s Tariffs
Tariffs Small businesses are struggling to thrive as they absorb the Trump administration’s new wave of tariffs.
-
Three Things Star Wars Fans Taught Me About Tax
Tax Tips May the force be with you and your taxes this Star Wars Day 2025.
-
Retirees: Don’t Miss These Valuable State Tax Breaks in 2025
Retirement Planning Selecting the right state for retirement can significantly impact your financial well-being.
-
10 Cheapest Places To Live in Florida
Property Tax Make your Florida vacation spot a place for daily living — these counties have the lowest property tax bills in the state.
-
Missed Tax Day? Nearly One Million Taxpayers Still Can File and Claim Valuable Tax Refunds
Tax Refunds As many as one million taxpayers could be missing out on a significant tax refund.
-
Which Generation Pays the Most Tax in the US?
Tax Burden Polls show that most people feel like taxes are unfair. But which age group bears the brunt of the tax burden in the United States?
-
Tax Day 2025: Don’t Miss These Freebies, Food Deals and Discounts
Tax Day You can score some sweet deals on April 15 in some select restaurants like Burger King, Shake Shack, and more.