TurboTax / Tax Calculators & Tips / All Tax Guides / General Tax Tips / Last Call Tax Tips for 2010

Last Call Tax Tips for 2010

Updated for Tax Year 2010


Note: The content of this article applies only to taxes prepared for 2010. It is included here for reference only.

Unless Congress acts, several important tax benefits will expire at the end of 2010. Here are the details.

As 2010 draws to a close, so will many important tax credits and deductions. This is the eleventh hour for many tax benefits included in the 2008 Economic Recovery Act as well as the 2001 Bush tax cuts. If not renewed by Congress, they will be history come January 1st, 2011. (Remember: The Bush tax cuts are still in effect for 2010 and these changes won’t impact your 2010 tax return.)

So take one final look—there’s still time to take advantage of them.  

  • Extra money in your paycheck. 
    If you’re a W-2 wage earner, you’ve probably been getting slightly larger paychecks since 2009. That’s because of reduced withholding linked to the Making Work Pay Credit.

    After December 31st, the $400 credit for single filers ($800 for joint filers) will expire and your paychecks will revert to the higher withholding rates. If you’ve been claiming the credit on your tax return, that benefit will expire as well.  
  • Help paying for college education.
    The clock is ticking on the American Opportunity Tax Credit, a benefit that can help you offset the costs of college tuition and related expenses you pay in 2010.

    A credit of up to $2,500 is available if your expenses for the first four years of college are $4,000 or more. The full credit is available to single filers making less than $80,000 and joint filers making under $160,000. Taxpayers with higher incomes may be eligible for a reduced credit. After 2010 this credit reverts to the less generous Hope Scholarship Credit. 
  • A tax credit for energy-saving home improvements.
    The Nonbusiness Energy Property Credit allows you to take a 30% tax credit on what you paid for any qualifying home improvement that makes your primary residence more energy-efficient. Installations like storm doors, windows, roofing, water heaters and air conditioning may qualify.

    The maximum credit is $1,500 and reduces your tax bill dollar for dollar. So don’t be left out in the cold—install your improvement by December 31st to qualify.  
  • Tax benefits for buying a fuel-efficient car.
    Now is the time to buy that fuel-efficient car you’ve been wanting. The Hybrid Vehicle Tax Credit is still available for vehicles purchased by December 31, 2010. The credit amount depends on when the vehicle is purchased.

    The IRS defines hybrids as cars that run on an internal combustion engine and a rechargeable battery. Leased vehicles are not eligible and the taxpayer must be the car’s original owner. You’ll find a list of qualified vehicles and other requirements at www.irs.gov.
  • The Earned Income Tax Credit in your pocket.
    On December 31st, say goodbye to the Advance Earned Income Tax Credit, which enables low-income workers to receive a portion of their earned income credit in advance in their regular paychecks. Starting in 2011, you can still take the credit on your tax return, but can’t get it in advance in your paycheck.
  • A tax benefit for working families.
    The Child Tax Credit is a major benefit for working families and single parents. In 2010, you can take a credit of $1,000 per child under 17 years of age. The credit will drop to $500 come January 1, 2011. Other rules concerning this credit will also change.

    For example, the Additional Child Tax Credit (a refund you get if your total child tax credits exceed your tax liability) will have new eligibility rules. The income threshold needed to claim the credit is $3,000 in 2010. Next year, that threshold will rise to $12,550.
  • Keep track for your flexible spending account.
    The rules on Flexible Spending Accounts (FSAs) are changing. For the rest of 2010, you can use your tax-free medical account to purchase over-the-counter medications without restrictions.

    Come January 1st, FSAs can be used for OTC products only if you have a doctor’s note or prescription. So plan your health spending deductions wisely—fast-track your OTC purchases now before the rules change and change your 2011 contributions to eliminate OTC products.  

Many of the Bush-era tax cuts from 2001 and 2003 are set to expire as well. The list is long, but here’s one of the most important changes:

  • Higher tax brackets may be coming back.
    American taxpayers got a big break in 2001 when tax brackets on ordinary income were reduced. On January 1st, you’ll ring in more than a new year—you’ll ring in new tax rates, too.

    Current tax brackets are set at 10%, 15%, 25%, 28%, 33% and 35%. The new 2011 rates will revert back to the pre-2001 rates of 15%, 28%, 31%, 36% and 39.6%.

Reviewing these expiring tax rules now can save you money come April 15. Unless Congress extends them by the end of 2010, when the ball drops on January 1st, most of them will be gone for good.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99$34.99*
Start for Free

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

* Important Offer Details and Disclosures
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Actual prices are determined at the time of print or efile and are subject to change without notice. Special discount offers may not be valid for mobile in-app purchases.
  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal efile of up to 5 federal tax returns. Additional fees apply for efiling state returns. E-file fees do not apply to New York state returns. Prices subject to change without notice.
  • TurboTax Mobile: Actual prices are determined at the time of print or efile and are subject to change without notice. Come back here before you file to confirm that the price has not changed, especially if it's been a while since you downloaded this app.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app features and content. TurboTax mobile app devices supported include Android 4.1 and above, iOS 8 on iPhone 4s and above, and iPad 2.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes will vary.
  • Pay for TurboTax out of your federal refund: A $34.99 Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • About our TurboTax Product Experts: Customer service and product support (phone or chat) vary by time of year. Phone support not included with Free Edition.
  • About our credentialed tax experts: Live tax advice service is available for your toughest tax questions; fees may apply. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Click here for full terms and conditions. Not available for TurboTax Business customers.
  • Get up to 10% on top of your federal refund: Amazon.com Gift Card offer is for federal refunds only. Limits apply ($2000 per e-card, maximum $10,000 per customer). Offer available only for TurboTax Online (except Federal Free Edition) or CD/download versions sold and shipped, or downloaded directly from Intuit or Amazon. Except as required by law, Amazon.com Gift Cards cannot be canceled, transferred for value or redeemed for cash.

    Amazon.com is not a sponsor of this promotion. Except as required by law, Amazon.com Gift Cards ('GCs') cannot be transferred for value or redeemed for cash. GCs may be used only for purchases of eligible goods at Amazon.com or certain of its affiliated websites. For complete terms and conditions, see www.amazon.com/gc-legal. GCs are issued by ACI Gift Cards, Inc., a Washington corporation. All Amazon ®, ™ & © are IP of Amazon.com or its affiliates. No expiration date or service fees.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2013 TurboTax products.
  • 4.8 out of 5 stars: Average based on customer ratings on TurboTax.com for TurboTax Online and CD/download products tax year 2014, as of January 2015.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • TurboTax CD/Download priority phone support: Priority phone support for TurboTax CD/Download Premier and Home & Business is accessible exclusively via the TurboTax.com Help Center.
  • Benefit Assist: After you file, TurboTax automatically shows you a full list of government benefits you may qualify for, like Food Stamps or reduced phone & utilities. Plus, we help you apply, saving you time and making it easier than ever to get more money! Estimate based on calculation of Benefit Assist users from tax year 2013 and published reports of average benefit and savings amounts from federal and state programs. Actual amounts and qualifications based on your individual situation; some individuals will not qualify. Feature may not be available for all customers.
  • Simplified State Experience: New, simplified state tax preparation available for most filers.
  • Eligibility for $25 cash back for returning Deluxe customers: Customers who have completed their 2013 taxes in TurboTax Deluxe (CD or download), and have completed their 2014 taxes in either TurboTax Premier or TurboTax Home & Business (CD or download), and apply here before 11:59PM PDT April 20, 2015, are eligible for $25 back. 2014 TurboTax Advantage users are ineligible for this offer. Terms and conditions are subject to change without notice.
  • $0 Upgrade Offer: Valid for customers who filed their 2013 taxes with TurboTax Deluxe (CD or download), completed prior year data transfer this year, and encounter an upgrade to either 2014 TurboTax Premier or 2014 TurboTax Home & Business (CD or download). Valid February 6, 2015 through April 20, 2015. TurboTax Advantage users are ineligible for this offer. This offer may not be combined with our $25 cash back offer. Terms and conditions are subject to change without notice.