Outline of Economic Recovery Package from House Ways and Means Committee
January 27, 2009 by Tax Blog
Filed under Questions & Answers
An outline of the provisions under the Ways and Means Committee’s Jurisdiction included in the Economic Recovery package follows:
Tax Relief for Individuals
· “Making Work Pay Credit”
· Expand Earned Income Tax Credit (EITC)
· Increase in child tax credit, $0 floor
Education
· Simplification of education credits w/ $2,500 credit for first four years of higher education expenses (increase income limitations), with credit partially-refundable (40% refundable)
Housing
· Remove repayment requirement on $7,500 first-time home buyer credit for homes purchased after 2008 and before termination of credit (June 30, 2009)
· Coordination provisions with new grant program for low-income housing being designed by the Financial Services Committee
Business
· Bonus depreciation
· 5-year carryback of net operating losses (excluding companies receiving TARP benefits, Fannie Mae, Freddie Mac)
· Extension of increased small business expensing
· Expand work opportunity tax credit for disconnected youth and unemployed, recently-discharged veterans
· Prospectively repeal Treasury Section 382 ruling
State and Local Governments
· Allow financial institutions to purchase State and local bonds and other changes
· Repeal AMT limits on new private activity bonds
· Taxable bond option for governmental bonds
· School construction bonds
· One year deferral of withholding tax on government contractors
Distressed Areas
· Provide tax exempt bonds and tax credit bonds to “recovery zones.” These tax exempt bonds and tax credit bonds can be used for a wide array of purposes to stimulate economic development, including job training and education. A “recovery zone” would be an area within a State, city or county that has exhibited high unemployment, foreclosures or poverty. These bonds would be allocated automatically to States and large municipal governments based on the number of unemployed individuals within that area.
Energy Tax Incentives
· Long-term extension of renewable energy production tax credit
· Temporary election to claim the investment tax credit in lieu of the production tax credit
· Coordination provisions with new grant program for renewable energy projects being designed by the Energy and Commerce Committee (sections 45 and 48 projects)
· Clean Renewable Energy Bonds (“CREBs”)
· Qualified Energy Conservation Bonds
· Energy efficiency and conservation tax incentives under sections 25C, 25D and 48
· Smart energy conservation, energy efficiency, and renewable energy R&D credit
· Refueling property credit expansions
Trade Adjustment Assistance (TAA)
Updates, modernizes and expands TAA to cover service workers, and substantially improves and extends coverage to manufacturing workers
Triples funds for job training
Unemployment Insurance (UI)
· Encourage UI Modernization
· Continue the Emergency Unemployment Compensation Program
· Increase UI checks by $25/week
Additional Temporary Assistance for Needy Families (TANF)
· Provide additional TANF Contingency Funds to serve needy families
Supplemental Security Income (SSI)
Provide a one-time additional SSI Payment to Low-Income elderly and disabled recipients
Child Support Enforcement Funding
· Restore federal funding for Child Support Enforcement for 2 years
COBRA Healthcare for the Unemployed
· Provides temporary subsidies for health insurance coverage to those who have lost their jobs.
· Extends the availability of unsubsidized COBRA coverage for older and tenured workers beyond the 18 months provided under current law
Health Information Technology (HIT)
Establishes standards, payment incentives and privacy protections to encourage the widespread adoption of health information technology.
Extends Moratorium on Selected Medicare Regulations through October 1, 2009
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- House Ways and Means Committee :: Outline of Economic Recovery Package
Breaking News: Higher Energy Prices Will Cut Demand
Nice to see Tom Friedman on the energy tax bandwagon. As he wrote in his Dec. 27 New York Times column, “I’ve wracked my brain trying to think of ways to retool America around clean-power technologies without a price signal—i.e., a tax—and there are no effective ones.”
Friedman needs to give his cranium a holiday break. Policymakers have been searching for this magic bullet for years, without success. They’ve tried government-mandated (CAFE) auto mileage standards, tax credits for the use of everything from hybrid cars to low-E windows, massive government subsidies for production of alternative fuels and sincere pep-talks from sweater-clad Presidents. Nothing has worked. Take a look at this chart from the Energy Information Agency:
As it shows, the only break in the steady growth of fossil energy use over the past half-century came with the oil price shocks of the 1970s and 80s. Friedman has discovered a pretty basic rule of economics: If you want people to buy less of something, raise the price.
For another example, take a look at some charts Diane Rogers over at Economistmom.com put together that show what happens, at least in the short run, when gasoline prices change dramatically. We’ve run a nice little natural experiment and the results are fascinating. When gasoline prices exploded last summer, demand plunged. You might say that $4-a-barrel gasoline focused the mind. Then, as prices plummeted over the past few months, consumption again rebounded, even with the economy in the tank.
It is a bit more evidence that consumers of energy will change behavior in response to price. Most economists think it takes a while for people to react, but react they do. CBO figures a sustained price increase of 10 percent will eventually cut consumption by about 4 percent. Others think the long-run response may be even stronger.
Sooner or later, however, if you use a tax to push up the price of energy, people will buy more fuel-efficient cars, appliances, and even homes. They may even think twice about buying that oversized mini-mansion 40 miles from work.
So far, Barack Obama’s transition team has been troublingly mum about raising energy taxes, even though he embraced a tax-like cap and trade program for fossil fuels during the campaign. Aides have dropped broad hints about a new round of big new government subsidies to develop alternative fuels and using a chunk of stimulus money to pay for mass transit. And, of course, Washington has made $25 billion available to automakers for energy R&D and pressed them to make new fuel-efficient cars in return for the additional bailout money they just got.
Giving away money to encourage green behavior is the easy stuff. But it will take more than that. I know, we are in a recession and can’t raise taxes right away. But with gas prices again south of $2.00 a gallon, it is folly to think many consumers will eschew a gasoline-powered $20,000 car for a $40,000 electric ride. Consumers are not dumb, and forcing automakers to build those cars in the absence of demand is madness. So is talking about energy independence without raising the price of fossil fuel.
The Wrong Time for Tax Credits
Just as demand for both alternative energy and low-income housing is growing, is the market drying up for the tax credits that drive much of the investment in both?
Evidence is that the answer is “yes.” The culprits: the crumbling economy, paralyzed bond markets, and the government itself. This may be yet another example of the always-deadly law of unintended consequences.
The Obama Rate
Barack Obama’s fiscal policy can be summarized pretty simply: Cut taxes for low- and middle-class Americans, boost spending for education, health care, and alternative energy, and pay for much of it raising taxes on the rich. That’s not the only way he’d finance his ambitious plans, of course—he’d also have to borrow $3 trillion and get some money from ending the war in Iraq—but he hopes to generate nearly $300 billion over the next decade just from rolling back the Bush tax rate cuts on high-bracket taxpayers.
Sarah Palin and Taxes
When it comes to taxes, Sarah Palin turns out to be an intriguing mix of Barack Obama and John McCain. Like Obama, she favors a tax rebate for consumers funded by a windfall profits tax on energy companies. But, like McCain, she also backs a gas tax holiday.
Irs Tax Credits: They Know When You’ve Been Bad or Good
Is the IRS all bad? The IRS is not all about seizing assets, bank accounts, and wages. The IRS does provide ways to reduce your actual taxes through Tax Credits. What makes a credit different from a deduction? A credit lowers your actual amount of taxes. A deduction lowers your actual taxable income.
Help for those who need it…So what kinds of tax credits are there, and how can I get them?
Most tax credits are dependent on your income. The majority of them do require that you be in a lower income bracket, so check with the IRS at irs.gov to see if you can qualify.
Some of the tax credits that you may qualify for are listed below. This is not a complete list, but it should give you an idea of what’s okay and what isn’t:
Child tax credit: You can receive a $1,000 tax credit for each child that is eligible as dependents. Be careful with this one, as claiming a child incorrectly can cause you to be in debt to the IRS.
Education credit: This is available to full and part time students. So whether you’re a twenty-something going full time or if you’re a returning student looking to improve your career options you can claim your schooling. You can claim up to $1,650 as a credit for your schooling for the year. Usually your school will send you a tax statement.
Home Energy Efficiency Credit: If you’ve made changes to your home to make it more energy efficient you can claim up to $500 as a credit. Keep your receipts so you can prove you made the improvements. Not only do you save on utility bills, but you get back money for the government.
Be certain…Tax credits can provide you with a much needed shot in the arm as they can greatly increase your income tax return. But beware, and make sure you know and follow the guidelines set by the IRS before you claim anything as a credit.
These same credits can backfire on you as the IRS frequently audits larger tax returns. You could find yourself owing the IRS if you incorrectly claimed a tax credit, or claimed something you shouldn’t have.
If you’re not sure about a tax credit feel free to drop your friendly former IRS-Hitman an e-mail.
Now you have the smoking gun…Use it!
IOM Contractor, offshore risk alert!
http://www.tarpon-uk.com/contractor-salary-calculator/?WT.mc_id=ON_V_YouTubeTop20
0845 643 1580
info@tarpon-uk.com
IOM Contractor, offshore risk alert!
Tarpon is an employment benefits company which offers contractors a tax-efficient payroll service. We are experts at giving impartial tax advice. We’ll claim up to 100% of your expenses back for you. And we’ll provide you with a personal business manager to handle both your admin and your invoicing. Plus many additional benefits making contracting more rewarding.
Delighted to meet you
We’re Tarpon, an employment benefits company specialising in contractor tax efficiency. We provide an indispensable array of services for contractors; not least of which is our payroll facility.
We have hundreds of clients and we’re renowned for our expertise. We’ve even negotiated terms directly with HM Revenue Customs.
Our team of highly trained and expert Account Advisers and Business Managers, all specialists in the world of contracting, deliver our services. They do so on a personal basis, backed up by a professional and well-resourced administration team.
We understand that when it comes to something as important as your livelihood you want to speak to:
* Someone you know
* Someone who knows you and your circumstances
* Someone that knows what they?re talking about
* Someone that you can rely on to do what they say they will, without being chased.
If you choose to join Tarpon, you will have a direct line to your own dedicated personal Business Manager, who will explain how everything works, be there to answer your questions, and look after your interests. That covers everything from making sure you?re paid accurately and on time, to providing advice on tax planning and developing the career plan you want.
When you?re a new Tarpon member, your Business Manager will call you at least once a week and talk you through everything you need to know. So you won?t have to invest time and energy into finding out about our simple procedures — you?ll be guided through in easy stages. When you are familiar with us, your Business Manager will step back and be there as and when you need them, but they will continue to call you every week, just to make sure everything continues to run smoothly.
Each Business Manager is a contracting and personal tax expert in his or her own right. They know the benefits of Tarpon inside out, and have an in-depth knowledge of contracting. So do use them!
You may never get to meet our experts, but behind the scenes we have people whose sole aim is to service all your contracting and tax needs, and ensure you are fully supported whilst contracting.
We are so confident about the high levels of personal service you will receive, that we will compensate you if we fall short of our Service Guarantee.
IOM recruitment agency, offshore payment risks highlighted!
http://www.tarpon-uk.com/?WT.mc_id=ON_V_YouTube
0845 643 1580
info@tarpon-uk.com
IOM Contractor, offshore risk alert!
The Government of the Isle of Man have a Financial Supervision Commission (FSC) which is responsible for licensing and supervising the activities of banks, building societies etc., in the Isle of Man and for investigating among other things potentially fraudulent financial services companies and companies that misinform clients.
The FSC released a Public Warning Statement about Standard Offshore Bank and its site http:// standardoffshoreonline .com
The site infers that it relates to the entity known as Standard Offshore Bank and that the bank is registered in the Isle of Man, does business in the Isle of Man or has links to the jurisdiction. The FSC report that they have investigated the claims and that the bank (or entity) is not incorporated or registered in the Isle of Man and furthermore it is not registered with the FSC and therefore not subject to their regulations and supervision.
The FSC goes on to point out that as a result of its in-depth investigations into this ‘company’ no genuine association has been found between it and any legitimate company in the Isle of Man. However, links have been established to other potentially fraudulent companies who also purport to be registered in the Isle of Man. Similarities were found between the website of Standard Offshore Bank and the websites of companies who have been the subject of previous FSC Public Warning Statements. Furthermore the alleged officers of Standard Offshore Bank were also listed as being president, chairman, director etc., of these other previously investigated companies.
According to the Financial Supervision Commission anyone considering doing business with the entity should “exercise the greatest possible caution before proceeding” and anyone who has already done business should contact the FSC’s enforcement division. If you have already entered into a financial transaction with the entity then please contact your local police fraud unit immediately.
Please note that this offshore bank warning from the Isle of Man’s FSC does not relate to the genuine entity known as Standard Bank Offshore which is part of the correctly registered and legitimate group of companies known as Standard Bank Group. To find out more about the genuine Standard Bank Group you can visit their site https://www.sboff.com
To find out more about the Financial Supervision Commission or to contact them visit their site http://www.fsc.gov.im
Tarpon is an employment benefits company which offers contractors a tax-efficient payroll service. We are experts at giving impartial tax advice. We’ll claim up to 100% of your expenses back for you. And we’ll provide you with a personal business manager to handle both your admin and your invoicing. Plus many additional benefits making contracting more rewarding.
Delighted to meet you
We’re Tarpon, an employment benefits company specialising in contractor tax efficiency. We provide an indispensable array of services for contractors; not least of which is our payroll facility.
We have hundreds of clients and we’re renowned for our expertise. We’ve even negotiated terms directly with HM Revenue Customs.
Our team of highly trained and expert Account Advisers and Business Managers, all specialists in the world of contracting, deliver our services. They do so on a personal basis, backed up by a professional and well-resourced administration team.
We understand that when it comes to something as important as your livelihood you want to speak to: * Someone you know * Someone who knows you and your circumstances * Someone that knows what they?re talking about * Someone that you can rely on to do what they say they will, without being chased.
If you choose to join Tarpon, you will have a direct line to your own dedicated personal Business Manager, who will explain how everything works, be there to answer your questions, and look after your interests. That covers everything from making sure you?re paid accurately and on time, to providing advice on tax planning and developing the career plan you want.
When you?re a new Tarpon member, your Business Manager will call you at least once a week and talk you through everything you need to know. So you won?t have to invest time and energy into finding out about our simple procedures — you?ll be guided through in easy stages. When you are familiar with us, your Business Manager will step back and be there as and when you need them, but they will continue to call you every week, just to make sure everything continues to run smoothly.
Each Business Manager is a contracting and personal tax expert in his or her own right. They know the benefits of Tarpon inside out, and have an in-depth knowledge of contracting. So do use them!