All the changes to the 2009 tax return may make it harder to file. If your 2008 tax return stopped with a Schedule K, get ready for the new Schedules L and M! But at the end of the day, 2009 should be a less taxing year for many American taxpayers.

Many Americans did not see increases to their wages in 2009. However, their tax bill may go down just by standing in place, as a result of various changes from 2008 to 2009. Take, for instance, a married couple with taxable income of $75,000, who can save as much as $300 due to changes in tax brackets. But there may be even more savings over last year:

  • If the couple has, say, two dependent kids, they will pay about $75 less than in 2008 because of the increase to the personal exemption.
  • If the couple claims a standard deduction rather than itemizes, they will gain approximately $125 as a result of the increase in the standard deduction amount.
  • That standard deduction amount could be even more, because they may now be able to add up to $1000 of real estate taxes to this standard deduction to get a new higher amount. The potential savings: about $250.
  • It gets even better if the couple bought a car in 2009: they may be able to pad their standard deduction even further adding by the amount of state or local sales or excise taxes on the car purchase.

Those paying Alternative Minimum Tax (“AMT”) should take note: If you fell into the AMT status as a result of itemizing, try figuring your taxes using the standard deduction with the allowable add-ons. You may be better off. The IRS does not require you to itemize if you don’t want to.

Seniors, too, should take note of the super-charged standard deduction since many may have paid off their mortgages, or live in low income tax states (such as Florida) where they don’t have much to itemize.

The biggest savings is available to buyers who bought homes in 2009 and who had not been owners of principal residences for three years prior. Many recent homebuyers can receive a tax credit of $8000, which is a dollar-for-dollar savings of $8000 in taxes. You can even decide if this credit would be better applied against your 2008 taxes or your 2009 taxes. Because the credit is phased out for high-income taxpayers, those who have had a decrease in their income in 2009 may be better off by taking it against 2009, and those with a big increase in 2009 income may be better off amending their 2008 returns. (There are somewhat complicated eligibility requirements – be sure to do your research or have a qualified tax preparer check this for you.)

Finally, here are some savings you may not have been aware of, but which you could be eligible for:

  • You can deduct contributions to the Haitian relief effort on your 2009 tax return for payments made between January 11 – March 1, 2010.
  • If you are self-employed, but forgot to get expense receipts for your meals on the road, you can use standard per diem amounts without substantiation.
  • If you made an IRA or ROTH IRA contribution, or had elective deferrals to your employer’s retirement plan, and your income is below a certain amount, you can get a credit for these contributions even if you also took an above-the-line deduction in the case of the IRA or made your elective deferrals pre-tax. It’s called a qualified retirement plan savings credit, and could be available for all you who, even in this year of dwindling income generally, still made those plan contributions. GOOD for you – you deserve that credit!
  • Finally, for the hard-core fitness fanatics who bike to work, and who have employers who provide parking or transit passes as tax-free fringe benefits to employees, it’s time to get in line and ask your employer for a tax-free $20 reimbursement a month for being so eco-friendly. $240 in extra income could be waiting for you there.

As with any other important financial decision, when it comes to filing your income tax return, it pays to be objective and diligent. Be sure to do your research before claiming any special deduction, using the resources available on the Internal Revenue Service Web site, www.IRS.gov. Or better yet, seek out a qualified tax professional to assist you with advice or income tax return preparation.