Recently I was listening to an IRS webcast on tax law changes (yes, it’s just as exciting as it sounds!) and something caught my attention. I was already aware that people living in disaster areas are eligible for various kinds of tax relief, but I realized that I’d missed an important fact. You don’t have to live in a disaster area to get a tax break; the Heartland Disaster Tax Relief Act of 2008 includes special provisions for educational expenses incurred by students attending college in areas struck by disaster in 2008. This article will be of interest even if…
Sometimes truth is stranger than fiction. I’ve learned that it’s not unheard-of for a professional tax preparer to advise a married individual to file his or her tax return using the single filer status. No! No! Bad tax preparer!
Last fall, one of my colleagues sought advice from a group of planners regarding a client whose CPA had advised him and his wife to file their returns separately using “single” filing status. His inquiry prompted a number of responses from other planners with similar experiences.
Here’s the problem: if you’re married as of the last day of a tax year, …Read More
The final version of the 1071-page American Recovery and Reinvestment Act of 2009 is due to be signed by President Obama tomorrow. My summary of the bill’s key tax items two weeks ago was not far off the mark, but there are a number of nips and tucks in the final version.
“Making Work Pay” tax credit
The refundable credit in the amount of 6.2 percent of earned income finally settled in at a limit of $400 for single returns and $800 for joint returns in 2009 and 2010. The credit starts being phased out at adjusted gross incomes (AGI) …
CCH has published a summary of the 2009 Stimulus bill that President Obama is scheduled to sign Tuesday, February 17th. Significant items include:
It’s too early to say with certainty what changes will be made in the tax laws this year. But it’s possible to make some educated guesses.
Tax Cuts, or Increases?
Things seem to be skewing towards tax cuts for middle income taxpayers in 2009. Moreover, higher income earners probably won’t see tax rate increases this year.
If the present economic malaise does not extend past 2009, chances are good that tax rate increases will be enacted for the highest tax brackets in 2010. Instead of topping out at the current 35%, the top income tax rate could return to 39.6%, …Read More