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To check the status of your IRS Refund
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E-News Schedule
During the 2009 tax season, our E-Newsletter will be sent on a monthly basis and from July-December we will be sending our E-Newsletter every other month.
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If you know someone who may find this information useful, or may be interested in our services, please click the "forward email" link below.
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Tax Credits for College Education
Eligible taxpayers may claim an American Opportunity tax credit up to $2,500. The credit is determined as 100% of the first $2,000, and 25% of the next $2,000 of tuition and related expenses paid during the year. Forty percent of the credit is refundable.
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Alternative Minimum Tax (AMT)
Tax planning strategies can be used to reduce the impact of the AMT. As a general rule, taxpayers subject to the AMT should accelerate income into AMT years and postpone deductions into non-AMT years.
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 It has been said that the 2009 Recovery Act is a stimulus package that is designed to jump start the economy. As a life long resident of Maine, having awoken to many mornings with sub zero temperatures, we know that with the right tools it is possible to jump start that which seems unwieldingly unforgiving.
On February 18, President Obama signed a massive $800 billion economic stimulus package, which Congress had passed a few days earlier. The American Recovery and Reinvestment Act is a mixture of tax incentives, including business tax cuts, and direct spending.
This issue of E-News is just a brief snapshot of some of the business and personal incentives. Most are temporary. Don't delay in contacting our office to learn more about these tax incentives. We're ready to help you maximize your tax savings.
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COBRA
Individuals who are involuntarily separated from employment between September 1, 2008 and January 1, 2010 can elect to pay 35 percent of their premiums for COBRA coverage and will be treated under the new law as paying the full amount. The former employer will pay the remaining 65 percent of the premium. In return, the employer will be able to credit its share of this temporary COBRA subsidy against wage withholdings and payroll taxes. The new law is an extremely technical application, especially with notice requirements and time-frames for eligibility for coverage.
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Making Work Pay Tax Credit The 2009 Recovery Act provides a refundable credit of up to $400 for working individuals and $800 for working families. The credit is calculated at 6.2% of earned income, and phases out for taxpayers with modified adjusted gross income in excess of $75,000 (or $150,000 for married couples filing jointly). Nonresident aliens and individuals who can be claimed as a dependent do not qualify for the credit. The new "Making Work Pay" tax credit benefits 95% of working families in the United States. Taxpayers will receive this benefit by reducing the amount of income tax that is withheld from their paychecks, or through claiming the credit on their tax returns.
Bonus Depreciation & Code Sec. 179 Expense Deduction
The 2009 Recovery Act extends the available expense deduction limitation under Code Sec. 179 of $250,000, and the phase-out amount of $800,000, through tax years beginning in 2009. Bonus depreciation is also extended through 2009 (through 2010 for certain longer-lived and transportation property).
Because these extensions are temporary and generally apply only to tax years beginning in 2009, new purchases should be made and placed in service accordingly. The increased expense deduction will revert back to $125,000 (as indexed for inflation) for qualifying assets after 2009. Further, the $125,000 deduction (as adjusted for inflation) is scheduled to revert back to $25,000 for tax years beginning after 2011.
Net Operating Losses Many taxpayers expected Congress to extend the carryback period for net operating losses (NOLs) to five years. The new law expands the carryback period to five years for qualified small businesses (businesses with average gross receipts of $15 million or less). The treatment is also temporary and only applies to NOLs for any tax year beginning or ending in 2008. Qualified businesses can choose to carry back NOLs three, four or five years. Immediate refunds are available to businesses that qualify.
Download a pdf file from our Website that summarizes the 2009 American Recovery and Reinvestment Act. | |
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Reinstating the Credit for Nonbusiness Energy Property (CNEP) for 2009 and 2010 and enhancing the Residential Energy Efficient Property (REEP) Credit
As you may know, the CNEP can be taken when qualified energy efficient improvements or expenditures are made for your principal residence, including new insulation; replacement windows, skylights and doors; central air conditioners; certain water heaters, furnaces or boilers; and a new metal or asphalt roof specifically treated to reduce heat loss. The CNEP, which was not available for the 2008 tax year, has been reinstated for eligible property placed in service after December 31, 2008, and before January 1, 2011.
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