TaxCoach Briefs:    February 17, 2009 — Extra!

Volume 4, Number 9

• Client Alert: Economic Stimulus Act

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CLIENT ALERT (EAL)
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ECONOMIC STIMULUS ACT

You don't live "off the grid," so you know that President Obama has just signed the “American Recovery and Reinvestment Act.” While much of the news focuses on the spending provisions, it also includes $287 billion in tax cuts. Here are the highlights:

• A new refundable “Making Work Pay” credit for 2009-2010 to offset the first $400 of Social Security tax clients pay ($800 for joint filers). It phases out as adjusted gross income (AGI) tops $75,000 ($150,000 for joint filers).

• A new higher education tax credit of up to $2,500 for your first $4,000 in higher education expenses. The credit phases out as AGI tops $80,000 ($160,000 joint). Clients can also use Section 529 plan funds for computer-related expenses, including software and online access (2009-2010 only).

• A new above-the-line deduction for state and local sales and excise tax you pay on a new (but not used) car, light truck, RV or motorcycle bought between January 1 and November 30, 2009. The deduction is limited to purchases up to $49,500 and phases out as AGI tops $125,000 ($250,000 joint).

• An enhanced “first-time homebuyer” credit (now $8,000) for purchases through November 30, 2009 -- with no requirement to repay the credit for homes purchased in 2009! (This credit phases out as your AGI tops $75,000 ($150,000 joint).

• The act extends the current $250,000 first-year expensing limit and 50% bonus depreciation provisions for purchases through 2009.

• Finally, the bill “patches” the Alternative Minimum Tax to protect 24 million mostly middle-income filers from the AMT’s bite.

Your clients don't live off the grid either. They know the stimulus bill, like it or not, is now law. They may even know the broad outline of the tax provisions. But there's still value in telling them yourself -- even if they hear the "news" someplace else. So we've prepared a Client Alert to help you score those points.

When you click on the 'Client Alerts' button in TaxCoach, you'll see a list of alerts, with this latest on top. The file 'Stimulus09' contains letters addressed to each of your clients that you've entered into the system.

You can download the file to your computer, and print on your letterhead using MS Word, or any word processor which supports Rich Text Format ('RTF'). You'll find instructions on the Client Alerts page.

Several of you have asked about email alerts for your clients. If you'd like, you can simply cut and paste the text into your email editor, then hit "send." But as easy and tempting as this sounds, there's still no substitute for old-fashioned snail mail when it comes to making an impression.

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We're happy to answer your questions on TaxCoach content, features, or marketing. While we give first priority to our All-Star and Hall of Fame members, we work to answer all questions. For best response, email support@taxcoachsoftware.com. If we think the answer will be useful to all of our members, we'll publish it (anonymously) here in the 'Member Q & A' section of TaxCoach Briefs.

Regards,

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