ÿþ<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.1//EN" "http://www.w3.org/TR/xhtml11/DTD/xhtml11.dtd"> <html xmlns="http://www.w3.org/1999/xhtml" xml:lang="en"> <head> <title>Taxes And Things: did you know?</title> <meta http-equiv="content-type" content="text/html; charset=iso-8859-1" /> <!-- **** Layout Stylesheet **** --> <link rel="stylesheet" type="text/css" href="../style/style106_right.css" /> <!-- **** Colour Scheme Stylesheet **** --> <link rel="stylesheet" type="text/css" href="../style/colour2.css" /> </head> <body> <div id="main"> <div id="links"> <!-- **** INSERT LINKS HERE **** --> <a href="../contact.htm">Contact Us</a> </div> <div id="logo"><h1>Taxes And Things</h1></div> <div id="content"> <div id="menu"> <ul> <li><a href="../index.htm">HOME</a></li> <li><a id="selected" href="../whatsNew.htm">What's New</a></li> <li><a href="../message.htm">Did You Know?</a></li> <li><a href="../links.htm">links</a></li> <li><a href="../forms.htm">forms</a></li> <li><a href="../testimonials.htm">testimonials</a></li> <li><a class="last" href="../faq.htm">faq</a></li> </ul> </div> <div id="maincolumn"> <h1>what's new</h1> <!-- **** INSERT PAGE CONTENT HERE **** --> You ve undoubtedly heard and read reports about the new economic stimulus law, the American Recovery and Reinvestment Act of 2009. But like many Americans, you may be asking  What s in it for me? To help answer that question, here s an overview of the most significant tax changes for individuals in the new law.<br /><br /> Making Work Pay Credit. The centerpiece of the new law, this income tax credit is designed to put extra dollars in wage-earners pockets for 2009. In most cases, the credit is $400 for singles or $800 for joint filers (or 6.2% of earned income, if less). But the credit is reduced for joint filers with incomes between $150,000 and $190,000 and for other filers with incomes between $75,000 and $95,000, and eliminated entirely above those levels. For most individuals, the credit will show up in their paychecks in the form of less income tax withholding starting in April. Bear in mind, however, that these withholding adjustments won t be precise, so upward or downward adjustments may be needed on the 2009 return. However, some individuals may need to make withholding or estimated tax adjustments to avoid an underpayment problem at tax return time.<br /><br /> Recovery Payments for Retirees. Retirees receiving Social Security, railroad retirement or veterans benefits will be receiving economic recovery payment in the form of $250 checks directly from the Treasury. If a retiree has earnings (e.g., from a part-time job) that qualify for Making Work Pay credit, the credit will be reduced by the $250 payment. So, here again, a withholding or estimated tax adjustment may be needed.<br /><br /> Unemployment Exclusion. For individuals who are out of work, the new law provides a special tax exclusion for the first $2,400 of unemployment compensation received in 2009.<br /><br /> Incentives for Car Buyers. Individuals who buy a new vehicle (including a passenger car, light truck, motorcycle or even a motor home) during the remainder of 2009 will generally be able to claim a tax deduction for the sales taxes on the purchase. In the case of high-priced vehicles, only the taxes on the first $49,500 of the purchase price are taken into account. In addition, the deduction is phased-out if income is between $125,000 and $135,000 on a single return or $250,000 and $260,000 on a joint return. Most significantly, individuals don t have to itemize deductions to claim this deduction. It can be claimed in addition to the standard deduction.<br /><br /> Help for Homebuyers. The new law expands the first-time homebuyer credit that was enacted last year. For homes purchased between January 1 and November 30, 2009, the law boosts the maximum credit to $8,000 (up from $7,500), subject to a phase-out for higher income homebuyers. What s more, the new law eliminates the rule that required a pay-back of the credit over 15 years. So eligible individuals who buy in 2009 will get a true subsidy from Uncle Sam for up to $8,000 of the cost of their homes.<br /><br /> Credit for Energy-Saving Home Improvements. Individuals who make energy-saving improvements to their homes in 2009 or 2010 will be able to claim a tax credit for 30% of the cost, up to a maximum of $1,500 over the two-year period. Improvements eligible for the credit include energy-efficient windows and doors, furnaces, water boilers, and circulating fans.<br /><br /> College Aid. Families struggling with the rising cost of college will get some aid from a new tax credit for higher education expenses that replaces the Hope Scholarship credit for 2009 and 2010. The maximum credit for each year is $2,500 (100% of the first $2,000 of qualified tuition and related expenses and 25% of additional expenses up to $4,000), compared to a maximum of $1,800 (for 2009) Hope credit. What s more, unlike the Hope credit which applies only for the first two years of college, the new credit can be claimed for any of a student s first four years of higher education.<br /><br /> Please call on us if you have any questions or would like to further explore how these tax changes will affect you and your family. <br /> <br /> Sincerely, <br /> <br /> Douglas A. Sevy </div> </div> <div id="footer"> &copy; 2004-2010 Douglas A. Sevy | <a href="../contact.htm">Contact Us</a> | Phone (951) 775-7944 | Fax (951) 602-6016 </div> </div> </body> </html>