If you purchased a new car after February 16, 2009, you may be able to deduct your sales tax even if you are not eligible to itemize.

The Hope Education credit has been increased to $2,500.

There are now two energy credits available for your home.  Each can be worth up to $1,500.  The ‘Nonbusiness Energy Credit’ applies to energy improvements you make to your home for certain high-efficiency heating and air systems, water heaters and stoves.  The credit is for 30% of the cost and will apply to purchases made in 2009 and 2010.  The maximum combined for both years will be $1,500.

The second “Residential Energy Credit”  provides for an additional 30% of purchases for home solar electric systems, solar water heaters geothermal heat pumps, wind turbines and fuel cell systems.  Not all systems will qualify so be sure to verify the manufacturer’s certification statement before you buy.  This credit currently only applies to improvements made in 2009.

The first $2,400 in federal or state unemployment benefits will not be taxed in 2009.

The money or vouchers you received for the Cash For Clunkers program is not taxable for federal income tax purposes.

You may be eligible for a $250 credit ($500 if married filing jointly) if you received retirement benefits from a U.S. or state or local government agency and the service was not covered by social security.  You are not eligible for this credit if you received the Economic Recovery Payment through your Social Security, Railroad Retirement or Veterans Disability Compensation.

You may be eligible for a $400 credit ($800 if married filing jointly) if you had earned income as an employee.  Your credit will be reduced if your Adjusted Gross Income is over $75,000 ($150,000 if married filing jointly) or if you take the government retiree credit or if you received the $250 Economic Recovery Payment.  You would have received that payment if you received Social Security, Railroad Retirement or Veterans Disability Compensation.

It may be time to take a serious look at your estate. It was anticipated that Congress would address the expiring estate tax rules but there is no sign of that happening. That means that the estate tax will revert to the rules that were in effect in 2001. This can mean major dollars to your heirs.

You may want to consider revising your California Income Tax Withholding Exemptions.  California is currently adding 10% to the withholdig tables to assist in the states cash flow problems.  They are effectively trying to borrow $1.5 billion from us taxpayers.  You can offset this reduction in your paycheck by increasing the number of exemptions you claim.  See your human resource or payroll representative at work.  They should be able to help you adjust your exemptions so your paychecks remain approximately the same.