Thursday, February 19, 2009

Tax Changes in Stimulus Bill that may Impact You


Category:Tax Law and Planning

Well, the behemoth stimulus package has passed - what now?  And how will it affect you?  A summary of the tax law changes in the bill courtesy of
JH Cohn.


Economic Stimulus Bill Contains Numerous Tax Changes

On February 17, 2009 President Obama signed The American Recovery and Reinstatement Act of 2009 into law. The legislation commonly referred to as the economic stimulus bill is a close to $800 billion stimulus package that includes nearly $300 billion in tax relief. The major tax provisions are as follows.

Making Work Pay Credit - a tax credit calculated at a rate of 6.2% of earned income up to $400 for individuals and $800 for joint filers applied retroactively to the start of 2009 continuing through 2010. The credit will be claimed either through a reduction in wage withholding or in a lump sum when filing one's tax return. The credit is phased out at a rate of 2% above adjusted gross income (AGI) of $75,000 ($150,000 in the case of joint filers). Employer FICA taxes are not changed.

Economic Recovery Payment - a one-time payment of $250 to Social Security recipients, railroad retirees and disabled veterans (reduces any Making Work Pay credit that the individual is entitled to).

AMT Patch - what has become an annual legislative exercise in recent years; the 2009 AMT exemption amounts have been raised slightly above their 2008 levels to insulate approximately 26 million middle-income taxpayers from the grasp of the AMT.

First-Time Homebuyer Credit - for purchases of a principal residence between January 1, 2009 and November 30, 2009, the credit has been increased from $7,500 to $8,000 and does not need to be repaid unless the house is sold within three years of the purchase. The credit phase-out remains for taxpayers with AGI in excess of $75,000 ($150,000 for joint filers).

New Car Deduction - individuals purchasing new vehicles in 2009 on or after the date of enactment can deduct sales taxes and excise taxes "above-the-line" attributable to the first $49,500 of the purchase price of any one vehicle. This deduction will be phased out once AGI reaches $125,000 ($250,000 for joint filers). Sales taxes paid on a lease agreement are not included.

Unemployment Compensation - in addition to increasing and extending unemployment compensation benefits for various workers, the first $2,400 of unemployment compensation is excluded from income for 2009.

Bonus Depreciation - extended through December 31, 2009 allowing for 50% first-year depreciation.

Sec. 179 Expensing - the increased 2008 limits have been extended to 2009. The maximum Sec. 179 expense will continue at $250,000 and the phase-out will not begin until fixed asset additions exceed $800,000.

Net Operating Loss (NOL) Carryback - this measure was scaled back significantly from earlier proposals. A 2008 NOL can be carried back up to five years (current law permits a two-year carryback) but only for qualified small businesses with average gross receipts of $15 million or less.

Transit Benefits Parity - the current $120 per month income exclusion for transit passes and van pooling is increased to $230 per month starting in March 2009, thus equalizing it with the $230 per month permitted for parking.

Qualified Tuition Programs - for 2009 and 2010 distributions from Sec. 529 plans will be tax-free when used to pay for computers and computer technology, including internet access.

Residential Energy Property Credit - the new law increases the credit from 10% to 30%, raises the maximum cap to a $1,500 aggregate amount for 2009 and 2010 installations, and eliminates the $500 lifetime cap. There are other energy incentives including credits for electricity produced from renewable sources such as wind and for plug-in electric vehicles.

COBRA Benefits - an individual who is involuntarily separated from employment between September 1, 2008 and January 1, 2010 can elect to pay 35 percent of his/her COBRA coverage with the former employer paying the remaining 65 percent. The former employer will receive a credit against income tax withholding and payroll taxes it is otherwise required to remit to the federal government.

To find out how these changes impact you, contact your J.H. Cohn service professional at 877-704-3500.

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Monday, February 16, 2009

Prevent Identity Theft

Category: Financial Planning

HOW TO PREVENT IDENTITY THEFT - Courtesy of Valeria and Carolyn Messina of http://www.messinamortgageinfo.com/

What is Identity Theft?

Identity theft is the unlawful use of another person’s identification, and may take many forms. Common methods of identity theft include credit card or other financial institution fraud, phone or utility services theft, and the taking of government documents or benefits.

Unfortunately, every day thieves are finding new ways of using the identities of their victims.

Identity thieves typically get this information from:
Stolen wallets and purses
Stolen mail
Unauthorized access to computers
Telemarketing scams
Sharing of passwords
Fraudulent e-mails
Dumpster diving (searching through your trash can)

How can I keep my identity safe?
Check your credit reports and scores on a regular basis.
Shred any documents and mail that contain your Social Security Number (SSN), account numbers and other personal information.
Don’t carry your Social Security card in your wallet or purse. Memorize your SSN.
Check financial statements and bills as soon as they arrive. Report any unauthorized transactions to the companies immediately.
Lock your mailbox. Deposit outgoing mail containing checks in a postal box—don’t leave it sitting in your unlocked mailbox or apartment lobby.
At home, secure sensitive information like bank and credit card statements, insurance records, etc., where they can’t be seen by visitors or workers.
At teller machines (ATMs), shield the PIN keypad while entering credit and debit card passwords.
Try to keep an eye on your credit card when you give it to a merchant or waiter.
When you order new checks, look out for them. Make sure they are delivered to a locked mailbox.
Change your passwords regularly and do not share them with anyone.
Nver respond to requests by phone or e-mail for personal information, no matter how urgent the request seems. Find the number of the company online and call to ask if the request is legitimate.
Don’t give out personal information on the phone, through the mail, or on the Internet unless you’ve initiated the call or you are absolutely sure you know the company or person you’re dealing with.
Read your bank’s privacy notice so that you understand how it uses your information for marketing. If you don’t want to get preapproved credit offers, call 888-5OPT-OUT (567-8688) to stop them.
Be careful about giving away information about yourself. Question why a business needs your SSN, mother’s maiden name or other information.
Monitor your mail for missed bills, credit card statements and other mail that you expected. A missing bill might mean that a thief has taken over your account and changed your billing address.
Investigate mysterious purchases, charges, bills or collection calls immediately. If you receive a credit card you didn’t apply for, find a strange charge on your credit card or get calls or letters from debt collectors about bills you don’t recognize, call the companies immediately to address the problem.
Question credit offers. If you know you have good credit but your application for a new credit card is denied, it could signal identity theft. When you are denied credit, you can get a free copy of your credit report from the credit bureau used by the lender.

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