Obama on tax breaks

Just ahead of Tax Day, President Barack Obama is urging Americans to take advantage of tax credits  for first-time homebuyers, college students and others.

Obama used his weekly radio and Internet address Saturday to promote some of the tax benefits in last year’s stimulus bill, saying they could save people hundreds or even thousands of dollars and were available to more than 100 million Americans. Even those who file before the April 15 deadline can amend their returns if there are savings they missed, Obama noted.

“No one I’ve met is looking for a handout. And that’s not what these tax cuts are,” Obama said. “Instead, they’re targeted relief to help middle-class families weather the storm, to jump-start our economy and to bring the fundamentals of the American dream — making an honest living, earning an education, owning a home and raising a family — back within reach for millions of Americans.”

Credits taxpayers may be eligible for include:

_Up to $8,000 for first-time homebuyers. The credit will be available through the end of April.

_Up to $2,500 for college expenses.

_Up to $1,500 for making energy-efficiency improvements to homes.

_For new vehicles purchased between Feb. 17-Dec. 31, 2009, the state and local taxes can be deducted.

_An expanded child tax credit providing $1,000 for each child under 17.

_The earned income tax credit now provides up to $5,657 to low-income families with at least three children.

Many workers have already received, through adjusted withholding in their paychecks, the “Making Work Pay” credit of as much as $800 for couples and $400 for individuals. For those who haven’t yet received the full amount due, they will get the additional money when they file.

Those who already have the full amount must claim the credit on their return. Due to an IRS glitch, however, some workers will owe money; in some cases, withholding tables gave people more than they should have received.

In their weekly address, Republicans accused Obama of raising taxes and expanding government too much with the health care bill and other initiatives.

Sen. Jon Kyl, R-Ariz., noted that taxes would rise Jan. 1, when President George W. Bush’s tax cuts expire.

“Since most small businesses pay taxes as individuals, the increase in marginal income tax rates will hit job creators hard,” he said.

“Republicans believe we need to act now, in a bipartisan way, to head off these tax increases,” he said. “That would show job creators and families that its safe to invest and save.

“So, these are two Republican ideas: first, reining in Washington spending; second, keeping taxes at a manageable level. If we do these two things, private businesses and American families will be able to save, invest and plan for the future,” Kyl said.

Obama wants to extend Bush’s tax cuts, except for individuals making more than $200,000 a year and couples making $250,000.

Source: AP