Tax breaks were created, or in some cases expanded, for autos and home purchases, as well as for certain residential improvements. Uncle Sam now pays more of some educational costs. Some workers get bigger tax benefits to offset their commute to work. Folks who no longer have jobs at least get some tax relief. Even how you pay your IRS bill could turn into a deduction.

Here’s a look at some popular tax laws that could come in handy as you work on your 2009 tax return.

TO CONTINUE READING THIS ARTICLE, CLICK THIS LINK TO BANKRATE.COM7 new tax laws to know.

The nonpartisan Congressional Budget Office predicts that Obama’s budget plans would generate deficits over the upcoming decade that would total $9.8 trillion. That’s $1.2 trillion more than predicted by the administration.

The agency says its future-year predictions of tax revenues are more pessimistic than the administration’s. That’s because CBO projects slightly slower economic growth than the White House.

The deficit picture has turned alarmingly worse since the recession that started at the end of 2007, never dipping below 4 percent of the size of the economy over the next decade. Economists say that deficits of that size are unsustainable and could put upward pressure on interest rates, crowd out private investment in the economy and ultimately erode the nation’s standard of living.

Still, the Feb. 1 White House budget plan was a largely stand-pat document that avoided difficult decisions on curbing the unsustainable growth of federal benefit programs like the Medicare health care program for the elderly and Medicaid, which provides health care to the poor and disabled.

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Moneynews – Congressional Report: Deficit Will Be Much Worse Than Obama Says.

With the passage of Obamacare, creating a vast new middle-class entitlement, a national sales tax of the kind near-universal in Europe is inevitable.

We are now $8 trillion in debt. The Congressional Budget Office projects that $12 trillion will be added over the next decade. Obamacare, when stripped of its budgetary gimmicks — the unfunded $200 billion-plus “doctor fix,” the double counting of Medicare cuts, the 10-6 sleight-of-hand (counting 10 years of revenue and only six years of outflows) — is at minimum a $2 trillion new entitlement.

It will vastly increase the debt. But even if it were revenue-neutral, Obamacare preempts and appropriates for itself the best and easiest means of reducing the existing deficit. Obamacare’s $500 billion of cuts in Medicare and $600 billion in tax hikes are no longer available for deficit reduction. They are siphoned off for the new entitlement of insuring the uninsured.

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Charles Krauthammer – Obamacare’s next trick: the VAT – washingtonpost.com.

So far this year, legislators have voted to raise cigarette taxes by $1 per pack in Utah and 75 cents a pack in New Mexico. At least a half dozen other states have been considering increases, including tobacco-growing South Carolina and Georgia. In 2009, 14 states and the District of Columbia raised cigarette taxes.

So much action is unusual: This is only the 10th time since 1950 that so many states have raised cigarette taxes at once, according to the Centers for Disease Control and Prevention.

“The main motivation at the moment for most legislators is revenue,” says Pete Fisher of the Campaign for Tobacco-Free Kids, an anti-smoking group. “The budget situation has certainly increased the number of states considering them.”

The average state cigarette tax is $1.34 per pack. That’s on top of the federal tax, raised last year to $1.01 per pack. Rhode Island has the highest state tax at $3.46 per pack; South Carolina’s is lowest at 7 cents. About 46 million Americans smoke.

TO CONTINUE READING THIS STORY, CLICK THIS LINK TO USA TODAY

Cigarette taxes are gold rush for states – USATODAY.com.

As you file your 2009 income taxes, you may qualify for a series of new tax cuts that were established through the Recovery Act. You could, for example, save money for attending college, making energy-saving home improvements, purchasing a home for the first time, or buying a new car.

Here are some of the new tax credits available through the Recovery Act that you may be eligible for:

• The Making Work Pay tax credit – Ninety-five percent of working families are already receiving the Recovery Act’s Making Work Pay tax credit of $400 for an individual or $800 for married couples filing jointly in their 2009 paychecks – and will continue to see these benefits in 2010.

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Rep. John B. Larson: 7 New Tax Credits Now Available Through the Recovery Act.

High-income investors would pay higher Medicare taxes, tax breaks for out-of-pocket medical deductions would be curtailed, and it would cost insurance companies more to pay executives millions of dollars. Those levies will help fund expansion of Medicaid services for the poor and subsidize health insurance to cover millions who don’t currently have benefits.

“It’s very clear that taxes are levied on the wealthy and the benefits will spread across the entire income distribution, with a lot going to expanded Medicaid distribution and expanding health insurance,” said Roberton Williams, an economist at the Tax Policy Center, a Washington research institute backed by the Urban Institute and Brookings Institution. “One couldn’t claim he didn’t keep that promise” to “spread the wealth around.”

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New Taxes for Health Care Help Obama ‘Spread the Wealth Around’ – BusinessWeek.

When the president finally came forward with an outline of his own proposal, aimed at bridging differences between the House and Senate versions of the legislation, he said it would have a 10-year price tag of about $950 billion and would reduce federal deficits over that same time period by more than $100 billion.

A preliminary cost estimate of the final legislation, released by the Congressional Budget Office on Thursday, showed that the president got almost exactly what he wanted: a $940 billion price tag for the new insurance coverage provisions in the bill, and the reduction of future federal deficits of $138 billion over 10 years.

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How Health Care Costs and Goals Came Out Right for Obama – NYTimes.com.

Including that so-called jobs bill.

Leo Hindery, a Huffington Post blogger who the event’s moderator (and HuffPost blogger) Steve Clemons identified as a “former hard-driving Republican CEO”, mocked the bill’s emphasis on tax breaks.

“I have never hired a man or a woman based on a tax credit,” Hindery said.

Employers hire when they are certain they will have a growing market for their products — and they don’t have that certainty now, Hindery explained.

As for the bill’s emphasis on incentivizing small and medium-sized businesses, Hindery said: “I can’t fix Dayton, Ohio” that way. “We have to have a large-business orientation,” he said. “You’ve got to go after this with big ideas and transformational ideas.”

“We have to come up with a non-belligerent equivalent of the kind of economic shock produced by World War II,” said Huff Post blogger Robert Kuttner, who is editor of the American Prospect and author of the upcoming book: “A Presidency in Peril: The Inside Story of Obama’s Promise, Wall Street’s Power, and the Struggle to Control our Economic Future”.

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Job-Creation Advocates Say Obama Just Doesn’t Get It.

Three years ago, more than 1.4 million individuals apparently decided they had better things to do than file their 2006 tax returns, even though they were due refunds. In total, more than $1.3 billion worth of refunds from that tax year is still sitting in the Internal Revenue Service account.Taxpayers can still get their old refund checks, which the IRS says could amount to more than $800 for some folks. But the claim, via a 2006 Form 1040, must be made by April 15. After that, the federally allowed three-year window of opportunity from the original filing deadline, which was April 2006, closes forever and Uncle Sam gets to keep the cash.

The IRS estimates that the median refund — meaning half of the checks will be larger and half smaller — is $604, and the money is owed to nonfiling taxpayers in every state and the District of Columbia, as well as to residents of U.S. territories and military filers who didn’t file returns that year.

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IRS holding billions in old, unclaimed tax refunds.