2009 Tax Provisions for Individuals
Tax season is here once again and with it are many changes to the tax law. Highlights of the new tax provisions include homebuyer credits, unemployment credits, education credits, and health coverage credits.
The homebuyer credit was expanded and extended on November 6, 2009. The provisions according to the IRS website (http://tiny.cc/homebuyer250) include:
An eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.
The new law also:
- Authorizes the credit for long-time homeowners buying a replacement principal residence.
- Raises the income limitations for homeowners claiming the credit.
- The 2009 first-time homebuyer credit increased to $8000
Additional provisions for individual tax payers include (http://tiny.cc/IRS568):
Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales tax they paid or other taxes and fees they paid in states with no sales tax.
Up to $2,400 in Unemployment Benefits Tax Free in 2009.
Health Coverage Tax Credit. The credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.
Education benefits. The new American Opportunity Credit and enhanced benefits for 529 College Savings Plans help families and students find ways to pay for college.
Visit the IRS website for a complete list and explanation of new provisions for both individuals and businesses.
The Goddess Entourage
An entourage is a group of associates that surrounds us. A well-crafted entourage will not only add flavor to your business and personal life, but contribute to your success in both areas. An entourage is different from a clique, which is an exclusive group of people. A clique is closed and doesn’t allow for the variety that a flowing entourage does. I became intrigued by the idea of an entourage after reading a Daily Tip about cultivating an entourage on the social network site, Ladies Who Launch. I have been thinking about who makes up an excellent entourage.
I am going to call mine the “Goddess Entourage.” My Goddess Entourage includes:
1. Goddess History. Goddess History is important in my circle because sometimes I need help being grounded. I have known my Goddess History since childhood. She has seen the good times and the bad. She understands how I became the person I am today. She reminds me of how far I have come and she celebrates the triumphs with me in a way no one else can.
2. Goddess Heart. My Goddess Heart listens to me without judgment. I value how she quietly listens to my ramblings, pieces together the heart of the matter, and returns sage advice that is not tainted with harshness or prejudice. She is kind and soothing like a balm. She is trustworthy and worth her weight in gold.
3. Goddess Truth. Goddess Truth is very blunt and she doesn’t hesitate to point out changes I need to make whether it is business or personal dealings. Her words sting occasionally, but she is motivated out of love for me and I can’t fault that.
4. Goddess Fun. I have to confess Goddess Fun is my favorite Goddess (and yours too!). She is someone I can let my hair down with completely. Goddess Fun stays mostly in my personal zone, but we do have occasion to do business. We are electric together and there is never a dull moment. We bring out the joy and happiness in each other to an extreme and I really like that heady feeling.
5. Goddess Business. Goddess Business is my more serious goddess. She offers excellent advice in how to handle certain business matters. She has a way of seeing a situation that is invaluable when I cannot see the forest for the trees. She tempers my artistic right-brain with her no-nonsense left-brain.
6. Goddess Art. My Goddess Art introduces me to the world of possibilities. With her I explore art, music, fashion, and everything in between. We have existential conversations and we dwell in the realms of dreams and ‘what ifs’. She encourages me to write, draw, paint and most importantly–to explore.
7. Goddess School. Goddess School has been with me through the grueling process of adult education. She understands the stress and pressures that full-time school and work brings. We help each other with assignments or listen to griping about team projects. She is a goddess in other ways too, but she shines in this area.
8. Goddess Network. Goddess Network is a sun in my business universe. She knows a lot of people and she doesn’t hesitate to introduce me around. She has helped me to make a lot of connections and she has shown me how to be an effective networker. She rocks my business world!
9. Goddess Health. My Goddess Health reminds me regularly that I have to take care of myself. She pushes me to exercise and diet. She makes sure I get a regular massage and she takes care of both my body and spirit in the process.
10. Goddess Sister. My Goddess Sister is a relative. She and I have so much in common and we are able to be authentic with each other without fear. She is someone I turn to on a regular basis…for no other reason than I enjoy being with her. She is a rock in the sea of my life.
You may recognize yourself in one of my Goddess Entourage. Some of my Goddesses trade tiaras and switch roles from time to time, but the essence of my entourage stays the same. I love that I have such strong, beautiful women in my life. I value each and every one of them. I am grateful to have such support in both my personal and business life. When we work together for each others successes we are unstoppable!
Who forms your Goddess Entourage?
Small Businesses Can Take Advantage of Special Tax Breaks
In February 2009, the American Recovery and Reinvestment Act (ARRA) extended some special tax breaks to small businesses. Businesses need to act fast to take advantage of several of the tax breaks. The bonus depreciation and increased section 179 deduction are valid through the end of 2009. The bonus depreciation is 50% of the cost of new capital expenditures; which allows for faster expense recovery. The section 179 deduction was increased to $250,000 and enables a small business to deduct the cost of machinery, qualifying vehicles, furniture, and computer equipment. If you have been holding off making purchases of new equipment, now is the time to do so!
The second provision that can benefit small businesses involves the net operating loss carryback. The carryback has been expanded to five years from two years for small businesses. The deadline for this special provision is September 15, 2009, for small corporations with a calendar tax year and October 15, 2009, for individuals. It can pay to have a tax expert review your situation and see if tax refunds may be retrieved from prior years by carrying back a 2008 loss.
The third provision is the exclusion of a gain on the sale of certain small business stocks. An exclusion of 75 percent of the gain upon the sale of qualified small business stock is available. The exclusion only applies to qualified stocks purchased between February 17, 2009, and January 1, 2011. The stock must be held for five years to be eligible.
A fourth provision modifies the required estimated tax payments that small business owners may need to make. The estimated tax payments can equal 90 percent of either their 2009 or 2008 tax (whichever is smaller).
Another provision involves COBRA insurance. Employers that provide 65 percent of the COBRA premium to eligible former employees may claim a credit on the 941 quarterly payroll reports.
Other provisions involve discharge of business indebtedness, acceleration of certain corporate business credits, and the holding period for S corporation built-in gains.
Please see your tax professional to determine if you are eligible for any of these provisions and jump start your economic situation.
(Information obtained from the Internal Revenue Service Website)
Kim White
I have over 20 years of both tax and accounting experience. I worked 10 years in several public accounting firms and 12 years in the private sector of accounting. Read more...
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