The Keiter Stephens Accounting Blog » Personal Taxation

Extension of American Opportunity Credit in the 2010 Tax Relief Act

General — Fri, 31 Dec 2010 17:36:13 +0000

The recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” includes a two-year extension of the American Opportunity tax credit for college costs. Added to the tax code in 2009 as a temporary replacement of the previous Hope tax credit, the American Opportunity credit both increased the tax relief available for students from middle-income families and extended relief for the first time to students from lower-income families. Read more.

If you would like more details about these provisions or any other aspect of the new law, please do not hesitate to contact your Keiter Stephens engagement partner.

AMT Relief in the 2010 Tax Relief Act

General — Thu, 30 Dec 2010 17:31:40 +0000

The recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” extends partial relief to individual taxpayers from the alternative minimum tax, or AMT. Earlier temporary measures to deal with the unintended creep of the AMT’s reach expired at the end of 2009, meaning that more than 20 million additional taxpayers would have faced paying the tax on their 2010 returns without the new relief. Read more.

If you would like more details about these provisions or any other aspect of the new law, please do not hesitate to contact your Keiter Stephens engagement partner.

Extension of expanded child tax credit in the 2010 Tax Relief Act

General — Thu, 30 Dec 2010 10:33:38 +0000

The recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,” made several important changes to the child tax credit, which is an up-to-$1,000 credit (i.e., dollar-for-dollar reduction in tax) for each qualifying child under the age of 17 that taxpayers with incomes below certain levels can take against their federal tax liability. Read more.

If you would like more details about these provisions or any other aspect of the new law, please do not hesitate to contact your Keiter Stephens engagement partner.

Individual and business extenders in the 2010 Tax Relief Act

General — Wed, 29 Dec 2010 10:29:32 +0000

In addition to extending the Bush tax cuts, providing relief from the AMT, and cutting the payroll tax by two percentage points, the recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” (Tax Relief Act) extends a host of other important tax breaks for businesses and individuals. Read more.

If you would like more details about these provisions or any other aspect of the new law, please do not hesitate to contact your Keiter Stephens engagement partner.

Extension of Bush Tax Cuts in the 2010 Tax Relief Act

General — Tue, 28 Dec 2010 10:24:54 +0000

The heart of the recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” is a two-year extension of the Bush tax cuts. But what, exactly, are the Bush tax cuts? Read more.

If you would like more details about these provisions or any other aspect of the new law, please do not hesitate to contact your Keiter Stephens engagement partner.

Overview of the 2010 Tax Relief Act for Individuals

General — Mon, 27 Dec 2010 09:18:26 +0000

The 2010 Tax Relief Act extends the income tax provisions referred to as the “Bush Tax Cuts” for two years. This extension will keep the tax rates for individuals the same at 10%, 15%, 28%, 33%, and 35%. Read more.
If you would like more details about these provisions or any other aspect of the new law, please do not hesitate to contact your Keiter Stephens engagement partner.

Henrico County’s Real Estate Advantage Program

General — Fri, 04 Dec 2009 18:05:05 +0000

One tax benefit many of you may not be aware of is Henrico County’s Real Estate Advantage Program. This real estate tax relief program applies to individuals who are age 65 or older, or who are permanently and totally disabled. In general, to qualify your total gross income must not exceed $67,000 and your net worth (excluding the value of your personal residence) must not exceed $350,000. The deadline for applying for the tax relief, which is limited to $3,000, is April 1. For additional details, see here.

Taxpayers Receiving Balance Due Notices after E-filing and Mailing Payment

admin — Wed, 10 Jun 2009 13:45:16 +0000

The IRS has been encouraging taxpayers to file online for the past few years. However, many taxpayers who owe an amount due are receiving immediate balance due notices when the electronically filed return is submitted.

Why is this happening?
Essentially, when an electronically filed return posts and a corresponding payment is not in the system, a balance due notice is generated. Since a payment mailed the same day the return is e-filed takes additional time to post, balance due notice issuance has increased as the number of returns electronically filed has increased.

What if it happens to you?
The IRS says that “if a payment has been sent, no further action is needed unless a second notice is received.” The good news is that beginning in June 2009, all balance due notices will be delayed for two weeks to allow any mailed payments to post, which should reduce the number of erroneous notices.

Individual Tax Relief Provisions in the 2009 Stimulus Act
The 2009 Stimulus Act provides incentives for families and individuals including new car purchases, energy-saving home improvements, and many more. Make sure you know what may benefit you.

The Stimulus Act provides relief from the Alternative Minimum Tax (AMT) in 2009 for 26 million families by increasing the amounts exempt from the AMT
To encourage the sale of automobiles, the Stimulus Act provides a deduction for state and local sales taxes and the excise tax paid on the purchase of new cars, light trucks, motorcycles, and motor homes purchased this year.
The Stimulus Act contains provisions extending the tax credits for energy-saving improvements to existing homes; increasing the Earned Income Credit and the refundable portion of the Child Credit; increasing and extending unemployment benefits; eliminating the federal tax on the first $2,400 of unemployment benefits; and subsidizing COBRA payments for certain involuntarily terminated workers.
The Stimulus Act modifies and renames the Hope Scholarship Credit. The American Opportunity Tax Credit (Opportunity Credit) provides assistance to those seeking a college education. Eligible taxpayers can receive an Opportunity Credit of up to $2,500 per eligible student in 2009 and 2010 to cover the cost of qualified tuition and related expenses paid during the year. A related provision allows students to use 529 Plan education distributions for the purchase of computers and computer technology in 2009 and 2010, similar to Education Savings Accounts.
The First-time Home Buyer Credit was increased from $7,500 to $8,000 by the Stimulus Act and the obligation to repay the credit was generally eliminated for homes purchased after December 31, 2008. The Stimulus Act also extends availability of this credit for an additional five months through November 30, 2009.
A provision of the Stimulus Act makes many individual taxpayers eligible for the Making Work Pay Credit (Work Credit). Eligible taxpayers will receive a 6.2%reduction in their federal income tax withholding or estimated payment requirement in 2009 and 2010. The maximum Work Credit benefit is $400 for individuals and $800 for families. This benefit will begin to phase-out when an individual’s adjusted gross income (AGI) reaches $75,000 ($150,000 for married couples filing jointly).
Finally, The Stimulus Act provides a one-time payment of $250 to adults eligible for social security, railroad retirement, or veterans’ benefits and individuals of any age receiving SSI benefits. In addition, the Stimulus Act provides a one-time $250 ($500 for a joint return where both spouses are eligible) refundable credit to certain federal and state pensioners who are not eligible for Social Security benefits.