by Suzanne Mathews

Created on: January 02, 2010   Last Updated: March 06, 2010

Tax season has begun and many taxpayers are searching for positive changes for filing taxes in 2010. Specifically, changes that will increase their refund or reduce taxes owed. In addition to the changes is the availability to electronically file a tax return versus paper filing while taking advantage of the credit and/or deductions.  Early filers planning to file electronically should first review the changes before filing their return. There are many changes, below is a brief summary on some of the most common changes taxpayers can expect to see when filing taxes in 2010.

*Standard deduction

The standard deduction has increased to $5,700 for taxpayers single or married filing separately, $11,500 for taxpayers married filing joint or qualified widow(er), and $8,350 for taxpayers head of household. This means, the standard amount is deducted from gross income before taxes due, if any, are calculated. However, if you itemize you cannot use the standard deduction. It is recommended to calculate which method, standard deduction or itemizing would benefit you the best on your tax return.  Refer to the IRS publication 17 for more information.

*Earned Income Credit

Earned Income credit (EIC) for 2010 has increased to $3,050 for one qualifying child, $5,036 for two qualifying children, $5,666 for three or more qualifying children or $457 if you do not have a qualifying child.  In addition to the EIC increase the maximum amount of income the taxpayer can earn to receive the EIC credit has increase. See publication 596, Earned Income Credit for more details.

*Unemployment compensation received during 2009

Taxpayers who received unemployment compensation during 2009 can exclude up to $2,400 of the amount received from their gross income. This means, the excluded amount of up $2,400 will not be tax on the taxpayers return.

*New home buyers

First-Time home buyer credit was extended to April 30, 2010; so long as the buyer initiates a binding contract by April 30, 2010 and purchase is settled by June 30, 2010. The maximum credit amount remains the same 8,000, for first time homebuyers. For qualifying purchases, taxpayers may elect to claim the credit on either their 2009 or 2010 tax returns.  

*Long term resident or existing home owners

In addition, some long-term resident homeowners may also qualify for a tax credit. With the new law longtime residents could qualify for a credit up 6,500, so long as they own the home

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