American Recovery and Reinvestment Act Highlights
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.