The Brady Brief - Tax Cuts

Statement

Dear Friend,

Tax time is never fun. But this year, millions of families will find their tax burden lighter and bigger refund checks in their mailboxes. That's because the Recovery Act, which I supported, passed last year, reducing taxes by almost $100 billion last year and by $220 billion this year.

As you file your tax returns, I hope you'll keep in mind the many new credits and deductions created by the Recovery Act. The following outlines the major new deductions, but for more information, please visit my website.

* Making Work Pay credit: 95% of working families are receiving this credit, which means $400 less in taxes for individuals and $800 less for married couples
* College expenses: Families and students can claim up to $2,500 to pay for college expenses
* First home purchase: If you have bought your first home by April 30 of this year, you can claim an $8,000 deduction
* Energy efficiency incentives: If you've made your home more energy efficient through steps like adding insulation or energy-efficient windows, you can claim a $1,500 tax credit
* New vehicle purchases: If you bought a new vehicle between February 17 and December 31 of last year, you can deduct the state and local sales taxes from your federal tax return
* Family tax credits: If you're a moderate-income family, the Recovery Act increased your tax credits: the Earned Income Tax Credit is now $5,657, and it's now easier to claim the Child Tax Credit
* Tax-free unemployment benefits: Unemployment benefits are usually taxable--but if you were looking for work last year, the Recovery Act made the first $2,400 in unemployment benefits tax-free

For an easy way to see which tax benefits are available to you under the Recovery Act, check out the Tax Savings Tool.

These are still the hardest times we've seen in decades, and America has a long way to go before its economy is fully back to good health. I look forward to taking even more steps to better our economy in the coming months. If you have any questions about this or any other issue, please contact any of my offices.

Sincerely,

Robert Brady
Member of Congress

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