Dan Posted January 23, 2009 Report Share Posted January 23, 2009 Question: Is there a $500 credit for workers and $1,000 credit for a couple that has been passed by the legislature? If there is, what line of Form 1040 are we looking at? Where is the documentation about this in IRS Material? Quote Link to comment Share on other sites More sharing options...
JRS Posted January 23, 2009 Report Share Posted January 23, 2009 Other than the property tax check off on the standard deduction, for those not itemizing, the following has made the rounds. As you can see, this is a plan that is being proposed. "Democrats on the House Ways and Means Committee have released a tax plan that they hope will provide additional economic stimulus to taxpayers who have yet to demonstrate the effectiveness of last year's stimulus package. The new plan includes a $500 tax cut for single taxpayers and $1,000 for married couples. Rather than sending checks, the tax cut is expected to be achieved by reduced withholding, thus positioning this stimulus attempt as one focused on working Americans, as opposed to the 2008 plan which included many citizens who receive benefits but not earned income. This benefit would phase out with incomes of $75,000 for single workers and $150,000 for married workers. The current $1,000 child tax credit would become a refundable credit with no upper cap on income, and new college tuition credits are included in the plan. An expansion of the controversial Earned Income Tax Credit is also included. The current credit available to first-time home buyers is a credit that must be paid back. The new legislation would take away the requirement for repaying the credit. The House plan calls for additional write offs to small businesses investing in capital expenditures over the next two years. As the Wall Street Journal reports, this type of bonus depreciation has been tried in the past with limited success. The plan includes an option for certain businesses to carry back net operating losses for five years instead of the current two-year option. Companies that benefited from the TARP (Troubled Assets Relief Program) bailout plan would not be eligible to participate in the new carry back rules. Additional measures include a job credit to businesses who hire unemployed veterans or disconnected youth, i.e. unemployed young adults age 16 to 25 who are no longer attending school. The Senate is expected to offer a tax stimulus bill of its own, and then the wrangling begins as the House and Senate attempt to reach a settlement on one bill that can be presented to President Obama." -------------------------------------------------------------------------------- AccountingWEB.com Jan-21-2009 Categories: Taxation, Legislation, SB Zone News, Income Tax News, Tax Zone News, AW.com Top News Story Times read: 1634 Add this news feed to your site for free! -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Quote Link to comment Share on other sites More sharing options...
Dan Posted January 23, 2009 Author Report Share Posted January 23, 2009 Thanks JRS!!! If the answer you gave only reduces withholding on a W-2, then there is no other line on Form 1040. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted January 24, 2009 Report Share Posted January 24, 2009 Question: Is there a $500 credit for workers and $1,000 credit for a couple that has been passed by the legislature? If there is, what line of Form 1040 are we looking at? Where is the documentation about this in IRS Material? NO. This is something that Obama has proposed, without details, that MIGHT be passed for 09. Will not effect this year's returns, I'm sure, since they have never yet passed a tax bill credit that was retroactive to a past year. Quote Link to comment Share on other sites More sharing options...
David1980 Posted January 25, 2009 Report Share Posted January 25, 2009 NO. This is something that Obama has proposed, without details, that MIGHT be passed for 09. Will not effect this year's returns, I'm sure, since they have never yet passed a tax bill credit that was retroactive to a past year. Yeah, worst case scenario would be doing the same thing they did last year and basing it off a 2008 income tax return. However it sounds to me like the withholding adjustment is getting pushed as the method this time which makes it completely transparent to the taxpayer and us, other than they will receive more money per paycheck for some period due to lower withholding. Quote Link to comment Share on other sites More sharing options...
GeneInAlabama Posted January 25, 2009 Report Share Posted January 25, 2009 Will not effect this year's returns, I'm sure, since they have never yet passed a tax bill credit that was retroactive to a past year. Don't be too sure about anything. A number of years ago when Alabama required employers to withhold a portion of unemployment insurance from employees, they passed a law increasing the amount from I think .5 percent to I believe 1 percent. THE LAW WAS RETROACTIVE BACK SEVERAL QUARTERS. Employers had to withhold the extra amount for those quarters from the employees salaries for that period, and even in cases where employees were no longer working for the employer, the employer had to pay it himself if he couldn't get it from the former employee. Employers were unhappy, employees were unhappy, everybody was unhappy except the revenue department. Since that time I am not surprised by ANYTHING the government does. Quote Link to comment Share on other sites More sharing options...
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