THE AMERICAN RECOVERY ACT: What Does It Mean To You?

As a small business owner I sometimes find myself not keeping abreast of all the tax regulations because I’m busy advertising and running my business. Now with the latest Stimulus package approved by Congress, I needed to know the changes that will impact me personally and as a business owner.

Ronald R. Mueller, MBA, Ph.D. author of “Home Business Tax Savings Made Easy" is informing people that the American Recovery and Reinvestment Act of 2009 is HUGE - not just in its price tag, but also in its complexity - so you can expect to read a whole string of Tax Tips as Dr. Muller continues to dissect this massive package containing 100's of both smart investments and pork barrel projects. Due to my busy schedule, I don’t have to go searching for the information because Dr. Mueller will send updates directly to my inbox.

HERE ARE SOME OF THE HIGHLIGHTS:

• The Section 179 "accelerated depreciation" limit of $250,000, which expired on 12/31/08, has
been extended throughout 2010
• The 50% Bonus Depreciation on purchase of business assets, which also expired on 12/31/08, will
continue also
• 5-year "carry-back" of Net Operating Losses for small businesses (more on this in my next issue
of "Tax Tips You Can Bank On")
• Temporary relief of Estimated Tax Payments for small businesses (more on this in my next issue
of "Tax Tips You Can Bank On")

• W-2 workers' take home pay will increase by $400 (for individuals) and $800 (for married couples)
beginning on/about April 1, paid at rate of 6.2% of earned income, until the $400/800 limits are
reached. Phase-outs apply for high income earners.

• Social Security recipients, Veterans who are on disability pay, and Railroad Retirees will each see
$250, which will be paid by the agency producing their current monthly checks.

• Anyone (not just small businesses) who purchases a new car, light truck, RV or motorcycle from
February 17 through December 31, 2009 may deduct, on their Federal tax returns, any state and
local Sales and Excise taxes.

I think you will find this information to be very valuable. I plan to purchase a new car within the next couple of months. Now thanks to the last bullet above, I will be able to write of the sales and excise taxes. That is awesome!

If you want to be kept in the loop regarding both personal and business tax issues, go to http://www.kickstartcart.com/app/aftrack.asp?afid=943622 and subscribe to “Tax Tips You Can Bank On”. Be sure to pass this valuable information on to everyone you know.

Have a Great Day!

Yvonne Benjamin
www.GreaterTravelBiz.com
yb@greatertravelbiz.com

Tags: act, based, business, deductions, home, irs, recovery, savings, stimulus, tax

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Comment by Ralph Westerberg on March 3, 2009 at 4:20pm: Thanks for the info. Any and all tax savings make our bottom line that much higher in profit.
Ralph

Comment by jolene on March 3, 2009 at 3:58pm: great information i well pass this on to family that could use this thank you so much

Comment by D.Garrette Insurance Agency on March 3, 2009 at 3:55pm: I knew that this was going to be a great year inspite of the economy.

Comment by Clay Page on March 3, 2009 at 3:54pm: I agree there are a lot of changes and benefits that will manifest in the near future for small businesses who earn LESS than $250,000 per year (if you earn over $250,000 a year - beware!)

However, as we all know as small business owners, that spending more than we have has never been a wise move. The interest on this so-call-economic package exceeds trillions of dollars and we get nothing in return for interest paid. The total estimated cost per TAX-PAYER, who pays this bill, is $325,000 per person (tax-payer).

So in essence, tax-payers have personally assumed a $325,000 liability over the next 10 years (as it stands today) and that is without the cost of the hidden programs that haven't even started yet, but approved.

So the real question is: For the amount of debit that each tax-payer has been burden with, is the finanical rewards equal to the debit we gained over $32,500 a year)? To gain a few little tax breaks in my book doesn't equate to a wise investment of the people.

Who will pay back this debit? Big business? No, they will continue to move overseas and we'll continue to lose jobs in the states. Will it be small business? Yes and individuals.

We will see 60-70% income tax brackets again (late 70s - for those of us who lived through that era know what I'm talking about) because this is no other way to pay down the debit.

Is there hope at the end of the tunnel? Yes!

Vote again next year and remove those in Congress who don't walk their own talk, or as we know small business today will be non-exsistance in a few years.

Respectfully submitted.

Clay Page

Comment by Joseph Hewitt on March 3, 2009 at 3:45pm: Does anyone understand what the administration’s idea of a “wealthy” individual is? Why isn’t there more adjustment on thresholds that apply to “wealthy” people for those who live on the coast? My rent in Wisconsin was $500. My rent in California is $2000. God forbid anyone actually address that. Apparently I’m rich even though my standard of living was higher in the Midwest.

The best part about it is that I lost so many deductions this year that it is going to prevent me from having enough cash for a down payment on a house. Mission accomplished government! Down with the “wealthy”!

Comment by L.A. "Online" Fitness on March 3, 2009 at 3:28pm: Now this is what I call timely information. Thanks!

Comment by william clements on March 3, 2009 at 3:20pm: Great info and we need some recovery for sure!

Comment by ApacheCindy on March 3, 2009 at 3:20pm: Thank you so much!

Comment by Keith Tacla on March 3, 2009 at 3:12pm: Good stuff! It's nice to get some type of support in this struggling economy.

Keith Tacla
www.socialnetworkingsandiego.com