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Thursday
Apr142011

Tax Tip: Tax Changes for 2011

Comstock/Thinkstock(NEW YORK) -- Back in December, President Obama and Congress agreed on a number of tax cuts for this year.

“One of the little goodies in there was this two percent payroll tax holiday, and that's a reduction of Social Security tax," said Kathy Pickering of H&R Block. “You don't have to file anything, you don't have to do anything, it's just automatically calculated in your paycheck."

That's a big saving for wage earners and the self employed.

“If you make $50,000 a year you could be getting back $1,000 across the year in your paycheck," Pickering said.

That tax deal brought other benefits, including one that involves paying for college.

"The American Opportunity Credit got extended because that was set to expire,” Pickering said of the tax deduction for tuition and fees.

Pickering says there was another benefit for home owners in the tax deal.  “The energy credit was extended, but that's being reduced from $1,500 to $500.”

Copyright 2011 ABC News Radio

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