American Recovery and Reinvestment Act
New Law Extends Bush-Era Tax Cuts, Reinstates Estate & Gift Tax
On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 , or H.R. 4853 (hereafter, “the Act”). The bipartisan legislation extends for two additional years many of the so-called “Bush-era tax cuts” originally enacted under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Key provisions of the new law extend the individual and capital gains/dividend tax cuts for all taxpayers through 2012, enact a payroll tax cut for 2011, provide a two-year AMT patch, and establish a top estate tax rate of 35 percent with an exclusion of $5 million.
Tax Credits Still Available to Help Winterize Your Home
Energy tax credits available through the American Reinvestment and Recovery Act ( the Recovery Act ) are still available for homeowners looking to improve their property. These improvements can not only significantly lower your energy costs over time, but provide substantial savings on your 2010 tax return.
COBRA Subsidies, Eligibility Temporarily Extended
One piece of the Temporary Extension Act of 2010 ( H.R. 4691 ), signed into law earlier this month, was an extension to the COBRA subsidy and eligibility. Through March 31, 2010, employees involuntarily terminated will be eligible for the subsidy as previously clarified by the IRS. Employees already receiving benefits will continue until that date. Under the American Recovery and Reinvestment Act of 2009 , a new employer-provided COBRA subsidy was created to assist individuals who lose their jobs involuntarily during the current economic recession. The subsidy was originally scheduled to expire at the end of last year, but the 2010 Department of Defense Appropriations Act, enacted on December 19,. Read More.
IRS Offers 8 Facts About the 2009 New Vehicle Sales and Excise Tax Deduction
Yesterday, the IRS released a list of eight facts about the 2009 New Vehicle Sales and Excise Tax Deduction : State and local sales and excise taxes paid on up to $49,500 of the purchase price of each qualifying vehicle are deductible. Qualified motor vehicles generally include new cars, light trucks, motor homes and motorcycles. To qualify for the deduction, the new cars, light trucks and motorcycles must weigh 8,500 pounds or less. New motor homes are not subject to the weight limit. Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010. Purchases made in states without a sales tax — such as Alaska, Delaware,. Read More.
Making Work Pay Tax Credit Requires Taxpayers to Pay Careful Attention
The American Recovery and Reinvestment Act of 2009 provides an individual tax credit in the amount of 6.2% of earned income not to exceed $400 for single returns and $800 for joint returns in 2009 and 2010. The credit is phased out at adjusted gross income (AGI) in excess of $75,000 ($150,000 for married couples filing jointly). The credit will phase out completely at modified AGI of $95,000 ($190,000 on a joint return). As a result, taxpayers should not forget to claim the Making Work Pay Credit on Schedule M . The credit is reduced by the amount of any Economic Recovery Payment ($250 per eligible recipient of Social Security, Supplemental Security Income, Railroad Retirement or Veteran’s benefits) or. Read More.
COBRA Subsidy Eligibility Extended Through February 2010
“COBRA” (Consolidated Omnibus Budget Reconciliation Act) coverage remains a benefit to many employees who terminate employment, allowing them to continue receiving employer health care coverage until they either find another job or secure private medical insurance coverage. Under the American Recovery and Reinvestment Act of 2009 , a new employer-provided COBRA subsidy was created to assist individuals who lose their jobs involuntarily during the current economic recession. The subsidy was originally scheduled to expire at the end of last year, but the 2010 Department of Defense Appropriations Act, enacted on December 19, 2009, extended the subsidy’s eligibility period and the maximum duration of COBRA premium assistance. As a result,. Read More.