Tax law changes could mean money in your pocket

By Molly Reuter - bio - email

Posted by Ellen Krafve - email

East Texas (KLTV) - Tax season is in full swing, but before you start your 2008 tax return there are a few tax law changes you should be aware of. The changes could put more money in your pocket.

Times are tough, and for many, the last thing you want to do is sit down and do your taxes. But tax experts say people may find they are due a larger refund than they expected.

Take first time homeowners for example. The government is now offering a credit, or $7500 loan.

"They do have to pay that back, but it's an interest free loan basically issued by the government issued in 2010," said Janice Manley a Senior Tax Advisor H&R Block. "They pay back 500 dollars a year through their tax return."

Many, however, are having a hard time even affording a home. Thanks to layoffs, wage cuts, and an unstable job market. If your income decreased last year, the IRS says you may be newly eligible for the "earned income tax credit," which usually means more money in your pocket. Then there's the "recovery rebate credit," which is based on the stimulus checks you received last year. If you didn't get a check, or your financial circumstances changed you may qualify for that rebate now.

"You don't have to pay taxes on this money, but it's reconciling your tax return is what it's doing," explained Manley. "If your situation changes where you had an additional child, since then there is going to be another credit added to it because your situation changed, or if you have a divorce then you guys are going to have to split that rebate check."

These are just a few examples of ways to put more money in your pocket this tax season.

Because there are several other credits you might qualify for, we created a link to the website that tells you about the credits. Go to Know More on 7 and click on "Tax law changes."