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AMERICAN RECOVERY & REINVESTMENT ACT
Information For Individuals:
| Homebuyer Credit |
Homebuyers who purchase by April 30, 2010, and settle by Sept. 30, 2010, may be eligible for a credit of up to $8,000. Documentation requirements apply. |
| COBRA |
Workers who lose their jobs between Sept. 1, 2008, and May 31, 2010, may qualify for reduced COBRA health insurance premiums for up to 15 months.
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Making Work Pay Tax Credit
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This credit means more take-home pay for many Americans in 2009 and 2010. Make sure that the proper adjustments are made so enough tax is withheld from your pay.
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| Money Back for New Vehicles |
Taxpayers who bought new cars and certain other new vehicles in 2009 can deduct the state and local sales taxes they paid as well as other taxes and fees they paid in states with no sales tax. |
| Health Coverage Tax Credit |
This credit increased from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.
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Information for Businesses:
| Net Operating Loss Carryback |
Small businesses can offset losses by getting refunds on taxes paid up to five years ago. We can provide information on carrybacks, an expanded section 179 deduction and other business-related provisions. |
| Energy Efficiency and Renewable Energy Incentives |
The American Recovery and Reinvestment Act provides numerous tax incentives for businesses including bonds for energy conservation, renewable engery, as well as grants and credits for those that qualify. |
| COBRA |
Some people who are eligible for the COBRA subsidy also qualify for the health coverage tax credit (HCTC) and may want to choose this more generous benefit instead. The HCTC pays 80 percent of health insurance premiums for those who qualify.
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2010 MILEAGE RATES
The rates for business purposes will be 50 cents per mile (a 5 cent per mile decrease from the 2009 rates). When the standard business mileage rate is used for vehicles owned by the taxpayer, depreciation will be considered to have been allowed at a rate of 23 cents per mile, 2 cents more per mile than in the previous two years.
The standard mileage rate for medical and moving expenses will be 16.5 cents per mile. This represents a 7.5 cent per mile decrease from 2009. The standard mileage rate for charitable purposes will be 14 cents per mile, the same as in 2009.
INCREASE OF PENALTIES
For tax years after December 31, 2009, new law increases the penalties for taxpayers who fail to file a partnership return from $89 to $195. Similarly, the penalty for failure to file a S corporation return increases from $89 to $195 as well. The combined increases are expected to raise approximately $1.2 billion over the next 10 years.
NONBUSINESS ENERGY PROPERTY CREDIT
By installing eligible energy-saving home improvements, a taxpayer can save up to $1,500 on their 2009 federal tax return, in addition to any energy savings that can result! The cost of certain high-efficiency heating,air conditioning, and water heater systems may qualify for the credit, as well as the costs of labor and installation. The cost of energy-efficient windows and skylights, doors, insulation, and roofing may also qualify, however the cost of the installation does not. This credit is up to 30 percent of what a homeowner may spend on these improvements.
RESIDENTIAL ENERGY EFFICIENT PROPERTY CREDIT
Homeowners may also be interested in checking out another tax credit regarding alternative energy equipment. The Residential Energy Efficient Property Credit, equals 30 percent of what a homeowner spends on qualifying equipment such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. Generally, labor costs are included when calculating this credit, and there are no limitations on amount that can be taken.
Here at Murphy & Company, LLC, we feel that an informed client is our best customer. We know that there is a lot of information on the Internet and it can be tough to determine what is valuable. That is why we have selected the following articles for you to view.
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