Take Advantage of the ARRA Act of 2009: Top 10 Benefits for You

This article is a mid summer reminder to take advantage of the American Recovery and Reinvestment Act of 2009 (Arra).

#10 reason) Your unemployment benefits. With our current national unemployment numbers racing to over 10%, don't forget to take advantage of this provision in the (Arra) act. For those of you who filed for unemployment from September 1,2008 to December 2009 you can reduce your unemployment reported income by $2,400. An additional benefit that was enacted was an increase in your unemployment compensation of an additional $25 per week added to your weekly compensation.

# 9 reason) COBRA insurance. For 9 months the federal government will subsidized your COBRA insurance premium payment by 65%. During 2009, COBRA premiums are scheduled to be reduced.

# 8 reason) #A)Economic Recovery Payment. This one time payment will be for individuals who are receiving social security, Tier I railroad payments, Va pensions, Disability benefits. Make sure that you file your 2009 tax returns for 2010 to be eligible for this payment. #B) Make Work Credit- A refundable credit of up to $400 for single tax payers,and $800 for married tax payers. This is for all eligible individuals who are self employed or an employee. The Benefit will be phased out at an modified adjusted gross income (MAGI) level of 75k/150K and 95K/190K (MAGI)

#Reason7) Earned income Credit. There is a maximum additional benefit of$269 for families of 3 or more.

# Reason#6) Child Tax Credit. For the 2009 tax year the earnings threshold has been lowered to $3,000 from the prior year threshold of $8,500

#Reason 5) Education. The American opportunity tax credit. This will enhance the hop education credit the maximum credit available is $2,500 up to 40% is refundable. See your tax adviser for details. Also take advantage of the expanded definition of a qualified higher education expense for your withdraws from the Section 529 plan distribution. You can now utilize your 529 plan to purchase computers and related equipment for your college education. Course materials to include textbooks purchase also are qualified expenses.

#Reason 4) A- Sales tax deduction for new vehicle purchases. For vehicles purchased after 2/16/2009 and before 2010 all local and state sales taxes and excise tax that are paid for a new vehicle purchase are now deductible. The maximum amount of the deduction is up to a sale price of $49,500. This deduction will also be allowed for those tax payers who file under the (AMT) schedule. B- Plug in electric vehicle credit. This tax credit
included a credit of up to $4,000 for plug in conversion kits and a 10% of the cost of a qualified 2/3 wheeled
vehicle that is purchase after Feb 17,2008. For vehicles purchased after 2009 the tax credit is limited to $7,500
for all vehicles. This tax credit will phase out after the auto manufacturer produces its 200,000 vehicles.

# Reason 3) Business Provisions A-) Depreciation, there is a bonus depreciation for most types of depreciable
property that has been extended to the 2009 tax season. B-)Section 179 expense election Small businesses
can expense up to $250,000 of eligible property placed in service during the year 2009. C-) The sale of small
business stock. Individuals are allowed to exclude 75% of the gain from the sale of a qualified small business
stock that was held for 5 years. The taxable portion of the gain is taxed as ordinary income.

#Reason 2) Residential Energy efficient property credit. Provides a nonrefundable credit for the purchase of
qualified solar energy, fuel cell, solar hot water, geothermal and wind property improvements. There is an elimination of the separate credit caps for those improvements. Credit was available for only solar property
improvements under prior law. A lifetime cap credit of $1,500 includes the following; oil furnaces, hot water boilers, exterior windows, exterior doors, and skylights.

#Reason 1) First time home buyer credit. This law is applicable to all primary residences that are purchased after January 1,2009 and before December 1, 2009. For a married filing joint tax payer that credit is $8,000 for
a single filing tax payer that credit is $4,000. If the primary residence is sold within 3 years of the date of purchase, the tax credit must be repaid. If the primary residence also ceases to be the principal residence of the
tax payer within the 3 years from the date of sale, that tax credit must also be repaid.