Bailout for them, tax breaks for you

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We all know that the Emergency Economic Stabilization Act of 2008 handed over billions to rescue Wall Street and automakers at the expense of taxpayers, but Uncle Sam threw a few bones to us, too. The most noteworthy include:

  • The Mortgage Forgiveness Debt Relief Act of 2007 was extended by 3 years, through Dec. 31, 2012. Qualified taxpayers who have forgiven debt related to foreclosures, deed-in-lieu of foreclosures and loan modifications don’t have to pay taxes on forgiven amounts up to $2 million—$1 million if married filing separately—on primary residences.
  • The 2008 alternative minimum tax (AMT) exemption was raised to $69,950 for married couples filing jointly, $34,975 for married couples filing separately and $46,200 for singles.
  • Starting in 2009, employers of bike commuters can provide a tax-free, monthly fringe benefit of up to $20.
  • The energy-efficient property credit was modified and extended through 2016 and now can be used to offset AMT liabilities.
  • The income threshold for qualifying for the child tax credit in 2008 was lowered from $12,050 to $8,500.
  • A new real property tax standard deduction for nonitemizers was extended through 2009.
  • The college tuition and related fees deduction of up to $4,000 was extended through 2009.