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Taking advantage of Uncle Sam's tax incentives

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RICHMOND, VA (WWBT) - The economic recovery act is Uncle Sam's way of trying to turn big ticket items into big savings.

There are many new government programs that promise you cash back for buying houses, cars, even replacement windows. We break down some of the governments new incentives to buy.

One look under the hood of the new 2009 Volkswagon Jetta TDI and you'll see why it qualifies for a new $1,300 tax credit.

"Because of the lean-burn technology it puts out very little pollutants into the air and is a very clean burning engine," said Mark Barnes, Chief Operating Officer for Volkswagon.

A clean tissue held under the exhaust comes away without a smudge. The lean-burn technology credit is available on nine different vehicles from four different manufacturers.

Barnes says the ultimate payback is when consumers can combine these incentives.

"If they happen to have a cash for clunker or a vehicle that qualifies as a clunker their eligible for another $4,500 on top of that, so you're really eligible for a total of $6,000," Barnes said.

Another big ticket item that's got Uncle Sam paying back -- real estate.

The first-time homebuyer credit pays qualifyied buyers up to $8,000 back if you purchase a home before December 1, 2009. You can even file an ammended 2008 tax return and get your credit this year.

"We had a client that used it not too long ago as a matter of fact," said mortgage broker Mary Kathryne Perkinson. "Because of the price point of the home he was purchasing, it allowed him to put more money into the property cause he knew he was receiving this tax credit."

Even current homeowners can get a break. If you've recently been denied for refinancing, now is a good time to look again.

"There are some new guidelines in place that will allow, under a new Fannie Mae program, for people who have limited equity to still refinance to the lower interest rates," Perkinson said.

Uncle Sam is also paying homeowners to make their homes more energy-efficient. You can save big on efficient roofing, windows, and insulation. Joe Spruell of Fan Roofing says the trick is finding out what qualifies.

"Not all asphalt shingles qualify, certain manufacturers have colors that they verify meet the government mandate and tax credit," Spruell said.

Be sure to read the fine print here, there is a catch.

"It's actually 30% of what the actual material cost to buy," Spruell said. "Their gonna think their gonna get their $1,500, but actually that's on the rare rare occasion that it gets that high."

Because the energy efficient tax credit is based only on the cost of the materials ... Spruell says replacement windows will more likely get you the full $1,500.

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