No one looks forward to Tax Day, but as soon as this Congress and Administration began their work last year, Democrats made April 15 a lot easier for many people.
The Recovery Act that was passed last year reduced federal income taxes for tax year 2009 for 98% of all working families and individuals. On average, these tax cuts saved working families and individuals an average of $1,158 on the tax returns they will file on Thursday.
Despite this good news, the majority of Americans do not perceive that they have received a tax cut under the Obama Administration.
According to a new report released today by the Citizens for Tax Justice only 12% of Americans believe that the president has cut their taxes.
In light of this widespread misunderstanding, we’ve highlighted many of the Recovery Act’s key tax cuts:
- Tax savings of up to $2,500 to pay for college expenses with the American Opportunity Credit
- Up to $1,500 in tax credits for home energy-efficiency home improvements with Energy Efficiency and Renewable Energy Incentives
- An $8,000 tax credit for the purchase of a first home with the First Time Homebuyers Tax Credit
- Tax deductions for the state and local taxes or fees paid on a new vehicle
- Expanded tax credits for moderate income families with children
- Up to $2,400 in 2009 unemployment benefits tax-free
As a result of these efforts, the average tax refund is up 10% or $266 for a record average of $3,036 so far — an increase the IRS says is largely due to the Recovery Act.
As for the future of your tax burden, nothing could have helped more than health care reform, which provides the biggest health-related tax cut in the last two decades. That’s progress worth celebrating.