February, 2009
Maco & Associates, LLC
Tax News and Updates
In This Issue
Obama Stimulus Tax Cuts
Business Tax Cuts
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Greetings!
You don't live "off the grid," so you know that President Obama has just signed the "American Recovery and Reinvestment Act." While much of the news focuses on the spending provisions, it also includes $287 billion in tax cuts. We've provided a few highlights below.
American Recovery and Reinvestment Act Highlights

unclesam  Listed below are some highlights for your personal taxes and planning for the upcoming year!
 
1. A new refundable "Making Work Pay" credit for 2009-2010 to offset the first $400 of Social Security tax clients pay ($800 for joint filers). It phases out as adjusted gross income (AGI) tops $75,000 ($150,000 for joint filers). This is not like the checks you received last year. It is basically changing your withholding so that you receive more per paycheck!

2. A new higher education tax credit of up to $2,500 for your first $4,000 in higher education expenses. The credit phases out as AGI tops $80,000 ($160,000 joint). Clients can also use Section 529 plan funds for computer-related expenses, including software and online access (2009-2010 only).

3. A new above-the-line deduction for state and local sales and excise tax you pay on a new (but not used) car, light truck, RV or motorcycle bought between January 1 and November 30, 2009. The deduction is limited to purchases up to $49,500 and phases out as AGI tops $125,000 ($250,000 joint).

4. An enhanced "first-time homebuyer" credit (now $8,000) for purchases through November 30, 2009 -- with no requirement to repay the credit for homes purchased in 2009! (This credit phases out as your AGI tops $75,000 ($150,000 joint).

5. The bill "patches" the Alternative Minimum Tax to protect 24 million mostly middle-income filers from the AMT's bite.
For Businesses
The act extends the current $250,000 first-year expensing limit and 50% bonus depreciation provisions for purchases through 2009.
First Time Homebuyers Credit    
 
The "What Ifs" of an Economic Downturn

The IRS has created a list of "What If" Scenarios during this economic crisis. Go to the IRS Website for more information.

For more information on this important legislation go to the IRS Website

IRA investments
You have until April 15, 2009 to make any contributions to your IRA for 2008. Remember you control the where to invest, so you choose risk free CD's or even money market funds. Call or email and we can help you determine how much this can save you in taxes.


Just in Time for Tax Season
We have a few new offerings:

Free E-filing: Beat the mail and get your return filed more quickly than ever before.

Audit Shield: Our "Better Safe than Sorry" protection plan which will pay up to $2500 in penalties, etc. imposed by the IRS due to an error on your part on forgetting to give us a critical piece of your income information). The plan is $24.95 and is added to your invoice, should you choose to use it

We Look Forward to Working With You Throughout
the Year and Wish You a Prosperous 2009!

 

From All of Us at
Maco & Associates, LLC
Telephone: (610)489-7215  
Email:info@macoassociates.com
4183 Ironbridge Drive
Collegeville, PA 19426
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