On October 3, 2008, President Bush signed the "Emergency Economic Stabilization Act of 2008"
(H.R. 1424).
The main thrust of this new law is to make funds available to the credit market and keep the economy going. In addition to the $700 billion bailout provisions, the law includes some tax law changes that could affect your tax planning.
The law provides relief from the AMT for 2008, includes energy and disaster relief provisions, temporarily increases FDIC insurance on bank accounts, and extends many tax breaks that had expired or were due to expire.
Among the tax breaks that were extended through 2009 were the following:
* The optional itemized deduction for state and local sales taxes.
* The deduction for qualified higher education expenses.
* The above-the-line deduction for classroom supplies purchased by teachers.
* The additional standard deduction for property taxes paid by those who don't itemize.
* Tax-free contributions from IRAs to charities by older taxpayers.
* The business research and development credit.
* 15-year straight-line cost recovery for qualified leasehold, restaurant, and retail improvements.
The law increased the 2008 alternative minimum tax exemption amounts to $46,200 for singles and $69,950 for couples.
To see how these and other changes in the tax law might affect your tax planning, please contact us. We are here to help you identify tax-saving options that fit your particular situation.
Howell & Sullivan
(828) 654-6226