Are there tax breaks for you in the new law?

You're probably aware that President Obama signed the
"American Recovery and Reinvestment Act of 2009" on
February 17. But have you checked to see what the new
law contains that could benefit you? Here's a quick
look at the law's tax changes and who's likely to
benefit.

MAKING WORK PAY CREDIT

Employees and self-employeds may qualify for a tax credit of up to $400 for singles and $800 for couples to be paid through lower withholding on paychecks or in a lump sum when tax
returns for 2009 and 2010 are filed. The credit phases out if income exceeds $75,000 for singles and $150,000 for couples.

FIRST-TIME HOMEBUYER CREDIT

Those who buy a first home before November 30, 2009, may be eligible for a refundable credit of 10% of the purchase price, up to a maximum of $8,000. Again income phase-outs fall at
$75,000 for singles and $150,000 for couples. If the home isn't sold for at least three years, the credit does not have to be paid back.

PAYING FOR COLLEGE

The Hope education credit is renamed the "American Opportunity Tax Credit," is increased to $2,500, and applies to four years of college, not just the first two. In addition, 40% of
the credit is now refundable. Income limits apply. Another break for those paying higher education expenses: In 2009 and 2010, funds in Section 529 college plans can be used tax-free to pay for students' computers, computer technology, and Internet fees.

NEW CAR DEDUCTION

Those who buy a new vehicle from February 17 through December 31, 2009, may take an above-the-line deduction for state and local sales and excise taxes on the first $49,500 of the vehicle's cost. In general, this includes new cars, SUVs, light trucks, motorcycles, and even motor homes. The income phase-out starts at $125,000 for singles and $250,000 for couples.

ntactOther provisions in the law raise the 2009 exemption
levels for the alternative minimum tax, make the first
$2,400 of unemployment benefits tax-free, and subsidize
health insurance premiums for those who lose their jobs.
For guidance in planning under these latest tax changes,
contact our office.

March 16th : Deadline to file Corporate Tax Returnfor  Year End corporations 

March 16th: Employers: Deposit Payroll tax for February if the monthly deposit rule applies. 

March 20th: Texas Sales Tax Returns & Payment due for Monthly Filers