All the tax credits/deductions and payments provided in the massive 2009 economic stimulus package will no doubt be hard to top in the years ahead. However the good news is that there will be more credits and deductions available to most Americans in 2010, 2011 and beyond. These will continue to be funded from the $700 billion stimulus package, with additional funds coming from President Obama’s ten year annual budget. From previous posts on the stimulus tax credits and the over 400 comments, folks are clearly divided on the payment of these credits with many complaining that these payments and tax breaks are just more wasteful government spending with little real impact. However, for many Americans, young and old, these payments are a big and much needed boon in tough economic times.

Whatever your stance as it relates to the stimulus payments, many of these tax credits and deductions have been passed by Congress and signed into law by the president. So if you qualify, saying no to what amounts to free money is just bad personal finance. Therefore plan ahead and make sure you take advantage of these credits.

Extended till 2013 : The Making work pay tax credit provides $400 for individuals and $800 for couples, phasing out completely at $190,000 for couples filing jointly and $95,000 for single filers. Because the credit is refundable (people can get it even if they owe no tax), most low-income workers will also qualify for the full credit. If you're eligible, your payroll administrator will make the withholding adjustment automatically and thereby increase your take-home pay. The average worker will see this tax credit in the form of a $10 and $20 pay rise per year based on your tax rate. You may prefer not to adjust your withholding amount and can get your stimulus in a lump sum payment as a tax refund when you file your 2009 and 2010 taxes. Under the 10 year Obama budget, this credit is set to be extended to 2013.

Home Owner Credit payout in 2010 for homes purchased in 2009: While you could have claimed the $8,000 stimulus funded new home buyer credit this year, many Americans will be claiming it in their 2009 tax returns filed in 2010. With the housing market showings signs of a bottom, this credit along with lower home prices is enticing buyers back into the housing market. The key is ensuring you are eligible to claim the credit in 2010, which includes:

- Only homes purchased from Jan 1 2009 to Dec 1 2009 are eligible for the fully refundable $8000 credit. If you constructed your main home, you are treated as having purchased it on the date you first occupied it. The credit may not be claimed before the closing date. So ensure that you complete your purchase/closing by December 1 to claim this rather large credit. It is unlikely this credit will be extended, given the bottoming of the housing market

- Your modified adjusted gross income (MAGI) must be less than $95,000 or $170,000 (if married filing jointly). Work with your accountant and/or financial planner this year to ensure your income falls in these thresholds

- You should buy the house on your own because you cannot claim the credit if you acquired it by gift or inheritance OR if you acquired your home from a related person

- If you and your spouse claim the credit on a joint return, each spouse is treated as having been allowed half of the credit for purposes of repaying the credit. So the total amount claimable is still only $8000. Also, if you are married joint filers, both partners must meet the first-time home buyer criteria. So if you are planning to get married this year to someone who has owned a home - you may want to buy a home first and get married in 2010.

Mass Transit Fringe Benefit in 2010: Employees may exclude from income $230 per month in commuter transit benefits in 2009 and 2010 (adjusted for inflation). These qualified transportation fringe benefits are excluded from an employee's gross income for income tax purposes and from an employee's wages for payroll tax purposes.

New Vehicle Tax Deduction in 2010: In addition to the working tax rebates and home owner tax credit, the stimulus bill provides tax breaks for new vehicle buyers by giving them a federal-income-tax deduction on local and state sales and excise taxes. It enables taxpayers to buy now and get cash back later on in their 2009 tax returns (filed in 2010). It is applicable to the sales and excise tax on any new vehicle up to $49,500 of the purchase price. The car, SUV's, light trucks or motorcycles must be purchased after Feb 16, 2009 and before Jan. 1, 2010 to qualify of this tax deduction. This is also another provision that is unlikely to be extended into next year.

Energy Credits in 2010 and 2011: Given the President’s strong focus on the environment and clean energy, it was not surprising to see additional tax credits for home energy efficiency improvements. The Stimulus package provided for a uniform credit of 30 percent on the cost of qualifying improvements up to $1,500, such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems. The credit can be claimed via your tax returns in 2010 and 2011 for improvements placed in service during 2009 and 2010.

Education Credits claimable in 2010 and 2011 - The new American Opportunity Credit modifies the existing Hope Credit for tax years 2009 and 2010, making it available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. It also adds required course materials to the list of qualifying expenses. Many of those eligible will qualify for the maximum annual credit of $2,500 per student. It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years instead of two. The full credit is available to individuals, whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. Many of those eligible will qualify for the maximum annual credit of $2,500 per student, so make sure you look into it, to help with rising college costs. There are also provisions in the 2010 budget to increase the maximum Pell Grant for college students, from low income households, in the next school year to $5,550.

2009 Social Security Payment. President Obama has proposed another $250 one time stimulus payment to social security recipients in 2010 as detailed in this article "An Extra $250 Social Security Stimulus Payment in 2010 for Retirees, Veterans and the Disabled". If you have not received your 2009 payment, make sure you visit the SSA website and follow up via the provided phone numbers.

The bulk of tax provisions in the stimulus package affect tax year 2009 - individual tax returns due April 15, 2010 - and tax year 2010 - individual tax returns due April 15, 2011. So it is important to plan your 2009 spend to ensure you qualify for the credits and deductions. I will continue to update this article and I encourage you to subscribe (free) via Email or RSS to get the latest news.

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