13 Tax Changes for 2010 That Can Save You Money

Photo (cc) by AR McLin

Let’s start with this news story I recently shot that will provide some of the most important breaks you’ll get this year. Then meet me on the other side for a super-condensed version of the nitty-gritty.

Now here’s a quick, concise, but complete look at changes for the 2010 tax year…

1. Tax credit of up to $8,000 for first-time homebuyers, $6,500 for existing homeowners

If you bought a home in 2010, you could qualify for a monster tax credit. (Credits are Nirvana in tax-land, because that’s a direct reduction of your taxes, not just a deduction from your income: Basically, they’re cash.)

Owned a house before? You could get a credit of up to $6,500. Property virgin? Up to $8,000. Very cool. Rules and exclusions, however, abound. If you think you might qualify, check out the minutia at this page of the IRS website.

2. Payroll tax credit

The good news: To try to get you out to the mall and thus get the economy back on it’s feet, last year you got a credit of 6.2 percent of your pay (the amount you pay into Social Security), capped at $400 for single filers and $800 for joint filers.

The bad news: You already got this money in the form of lower tax withholding in last year’s paychecks – it’s no help now.

3. Higher standard and itemized deductions

The standard deduction if you’re married and filing a joint 2010 tax return is $11,400, same as last year. If you’re single, however, your standard deduction increased by $250 to $5,700.

Good for the rich: As I mentioned in the video above, for tax year 2010, itemized deductions didn’t phase out as your income increased. If it’s deductible, you get to deduct it, no matter how much you made last year.

4. Free parking

If your company paid for your parking or transit costs last year, you don’t have to pay taxes on that benefit, providing it wasn’t more than $230 a month.

5. College tuition tax credit

Familiar with the Hope Credit? Well, forget about it. For tax years 2010 through 2012, it’s gone – replaced by the American Opportunity Tax Credit. If your adjusted gross income was less than $80,000 single, $160,000 joint, you get a credit of up to $2,500 per student, as long as the money was spent on tuition or books.

If you had higher income than the limits above, the credit starts phasing out.

6. Earned income tax credit

Got three or more kids? The maximum Earned Income Tax Credit goes up by $628.50 for 2010.

7. Deductible IRAs

If your modified adjusted gross income is less than $66,000 single or $109,000 joint, you can fully deduct money you contributed to an IRA, even if you’re covered by a retirement plan at work. Even if your income was higher than that, you might get a partial deduction.

8. Roth IRA conversions

In 2010, you could convert your regular IRA to a Roth, no matter how much you made. (In prior years, if you made too much, you couldn’t.) While you still have to pay taxes to do it, you can spread them over two years.

9. Estate tax exemption

If you died last year, your estate owes no taxes, no matter how rich you were. But then again, if you died last year, you’re probably not reading this.

10. Higher annual gift tax exemption

You could have given anyone (including me) up to $13,000 last year without owing any gift tax.

11. Credit for energy-saving home improvements

If you made any qualified energy-saving home improvements last year, you get a credit of 30 percent of the price, up to $1,500.

12. Educators’ deduction

You can deduct up to $250 per person – in other words, up to $500 for a couple of married educators filing jointly – of money you spent on books, supplies, computer equipment, and other stuff that you used in class unless it was reimbursed or you worked less than 900 hours during the school year.

13. Tuition and fees deduction

You can deduct up to $4,000 of college tuition and fees.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
9 Free Things That Used to Cost Us Money
9 Free Things That Used to Cost Us Money

Not everything is getting more expensive.

11 ‘Disposable’ Items You Should Be Reusing
11 Secret Uses for Everyday Items That Save Money
11 Secret Uses for Everyday Items That Save Money

These are simple solutions for life’s irritations.

How to Get Rid of 6 Hard-to-Sell Things
How to Get Rid of 6 Hard-to-Sell Things

Find out where to sell, donate or recycle items — and feel good about it.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

10 Useless Purchases You Need to Stop Making
10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

The 16 Cars Most Likely to Last 200,000 Miles
The 16 Cars Most Likely to Last 200,000 Miles

One automaker takes half the spots on a list of the longest-lasting vehicles.

7 Social Security Rules Everyone Should Know by Now
7 Social Security Rules Everyone Should Know by Now

Confusion over Social Security is a shame, considering how many of us will need this money badly.

9 Shopping Mistakes to Avoid at Costco
9 Shopping Mistakes to Avoid at Costco

Are you missing out on serious savings at your favorite warehouse club?

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

They don’t make coffee makers like this anymore.

11 Products Now in Short Supply Due to the Pandemic
11 Products Now in Short Supply Due to the Pandemic

Many goods we take for granted have become tough to find in 2021.

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

14 Things You Should Stop Buying in 2021
14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

Is Writing a Check Still Safe?
Is Writing a Check Still Safe?

Every time you pay by check, you hand your bank account numbers to a stranger.

6 Ways to Protect Your Retirement Accounts From Hackers
6 Ways to Protect Your Retirement Accounts From Hackers

Imagine having $245,000 stolen from your retirement account — and not being reimbursed.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

This Is the Most Dependable Car Brand in the U.S.
This Is the Most Dependable Car Brand in the U.S.

This brand’s vehicles are least likely to give drivers repair headaches, according to J.D. Power.

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

7 Hidden Sections of Amazon Every Shopper Should Know
7 Hidden Sections of Amazon Every Shopper Should Know

These little-known departments of Amazon are gold mines for deal-seekers and impulse shoppers alike.

7 Income Tax Breaks That Retirees Often Overlook
7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

The 6 Best Investing Apps for Beginners
The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.