2009 / 2010 Tax Law Changes
2009 was a year of many major tax law
legislations
Information for Individuals
- Making
Work Pay Tax Credit. This
tax credit means more take-home pay for many Americans. To make sure enough tax is
withheld from their pay, consult a professional tax preparer. NEW SCHEDULE M
- First-Time
Homebuyer Credit Expands. Homebuyers who purchase in 2009 can get a credit
of up to $8,000 with no payback requirement. NEW FORM 5405
- Money
Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct
the state and local sales taxes they paid or other taxes and fees they paid in states
with no sales tax. NEW SCHEDLUE L
This new schedule also increases the standard deduction by certain real estate taxes,
new motor vehicle taxes or a net disaster loss.
- Education
Benefits. The new “American opportunity
credit” replaces the Hope Credit. This new credit and enhanced
benefits for 529
college savings plans help families and students find
ways to pay higher education expenses.
- The
newly-enacted Worker, Homeownership and Business Assistance Act of 2009. The new law expands the Net Operating
loss provision, and the new legislation extends the Homebuyer Credit to April 30, 2010. it authorizes the credit for long-time homeowners
buying a replacement principal residence, and it raises the income limitations for
homeowners claiming the credit.
- Enhanced
Credits for Tax Years 2009, 2010. Find details on the earned
income tax credit and the additional
child tax credit.
- Increased
Transportation Subsidy. Employer-provided
benefits
for transit and parking are up in 2009.
- Up
to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals should check
their tax withholding.
- $250
for Social Security Recipients, Veterans and Railroad Retirees. The Economic Recovery Payment will be
paid by the Social Security Administration, Department of Veterans Affairs and the
Railroad Retirement Board. NEW SCHEDULE M
- Energy
Efficiency and Renewable Energy Incentives. These credits are back and expanded. Find out what individuals can do to
reap tax rewards.
- Health
Coverage Tax Credit. The credit increases from 65 percent to 80
percent of qualified health insurance premiums, and more people are eligible.
Information for Businesses. Some of
the provisions of the law primarily affect businesses.
- Making
Work Pay Tax Credit. Businesses should use the new withholding rates for their employees. For pension plan
administrators, new optional withholding procedures are available to supplement the
February withholding tables.
- Work
Opportunity tax credit. This
newly-expanded
credit adds returning veterans and "disconnected youth" to the list
of new hires covered by the credit that businesses may claim. Businesses have until
Oct. 17 to request certification for the tax credit for some new hires.
- COBRA:
Health Insurance Continuation Subsidy. The IRS has extensive
guidance for employers, including an updated Form 941, as well as information
for qualifying individuals.
- Energy
Efficiency and Renewable Energy Incentives.
- Net
Operating Loss Carryback. Small
businesses can offset losses by getting refunds on taxes paid up to five years ago. Information
on the carryback, an expanded section 179 deduction and other business-related
provisions, is now available. The Worker, Homeownership And Business Assistance Act
Of 2009 (WHBAA) further expands
the five-year NOL carryback to most businesses.
2010
Tax Law Changes
- President Signs HIRE
Act. March 2010, President Obama signed P.L. 111-147, the
Hiring Incentives to Restore Employment Act (HIRE) into law. While the legislation
contains tax breaks to encourage employers to hire, there are few provisions that directly
affect the average tax return. Most notably is the extension of the increase in the §179
expense deduction to $250,000 for 2010, payroll tax forgiveness for employers who hire
unemployed workers, and a tax credit (not to exceed $1,000) for employers equal to 6.2% of
wages paid to newly hired workers.
Full details of the tax
provisions of the HIRE Act will be available on this website soon.
- Health Care Reform. The President has signed the Patient Protection
and Affordable Care Act, which provides reform to the nation’s health care
system. The legislation contains many provisions related to employer-provided coverage,
coverage for the uninsured, and much more.
A summary of the tax related provisions will be available soon on this
website |
