MARQUETTE - With the deadline to this month's tax filing deadline approaching, you may want to check out a Tax Cut Calculator and a Tax Cut Checklist developed by the White House to help taxpayers understand how they are benefitting from some of the more than 40 tax cuts signed into law at the end of last year by President Barack Obama.
The calculator shows individuals and families how they are benefitting from the tax cuts this year via the Payroll Tax Cut, the American Opportunity Tax Credit, the expanded Earned Income Tax Credit and the Child Tax Credit.
After answering a few questions, the tax calculator generates a customized, printable checklist for the taxpayer.
The calculator is available at: www.whitehouse.gov/issues/taxes/tax-cut-calculator.
According to the White House officials, 5.1 million people in Michigan benefit from the Payroll Tax Credit; 356,000 Michigan families benefit from the American Opportunity Tax Credit and 299,590 people in Michigan had their unemployment benefits extended.
Some more details about each of the individual tax cuts, provided by the White House include:
- The Payroll Tax Cut: Creates a new Payroll Tax Cut reducing payroll taxes from 6.2 percent to 4.2 percent. Nationwide, the provision will benefit 159 million workers and provides a typical family earning $50,000 with a $1,000 tax cut this year.
- The American Opportunity Tax Credit: Families in Michigan will receive $727 million from the benefit, with an average of $2,000 per family to help pay for college. The credit provides up to $2,500 for each of four years of college to help cover the costs of tuition and other educational expenses.
- Child Tax Credit: The tax bill signed by Obama extended the $1,000 child tax credit and continued Recovery Act provisions that made it available to more families. That effort will increase tax credits for 11.8 million families, with families with one child receiving up to $1,000 more and some families with two or more children receiving nearly $1,500 more.
- Earned Income Tax Credit: The tax cuts bill extended expansions of the Earned Income Tax Credit for married couples and families with three or more children. In all, the provisions will benefit 5.8 million working families with 12.5 million children.
Additional tax cuts, from the Recovery Act, that taxpayers may be able to claim include:
- Residential Energy Credits: Under the Recovery Act, Americans who made some types of energy efficient upgrades to their homes last year can get 30 percent of what was spent back, up to $1,500 this tax season.
- First-time Homebuyer's Tax Credit: First-time homebuyers who purchased a home by April 30, 2010 and settled by Sept. 30, 2010 may be eligible to collect a credit of up to $8,000 with no payback requirement.
- Making Work Pay Credit: Over 110 million working Americans qualified for this credit from the Recovery Act, which saved individuals up to $400 per year and married couples up to $800 per year in 2009 and 2010. Though taxpayers probably received the benefit of this credit in your paychecks, from adjusted tax withholding by your employer, you must still claim the credit on your tax return.
John Pepin can be reached at 906-228-2500, ext. 206. His email address is email@example.com.