How Does The American Recovery & Reinvestment Act Affect You!

Just in case you had not heard..The American Recovery & Reinvestment Act is a massive $787 billion economic recovery package that dedicates about two-thirds to new government spending and the rest to tax cuts.  In order for existing public services to continue in the mist of this economic crisis, it is one the top priorities of the Obama Administration. The goal of this stimulus bill is to infuse money directly into the economy in the hope of bringing the nation out of recession, while creating 3 million to 4 million jobs.

For all you small business owners, 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. Dr. Muller continues to dissect this massive package containing 100’s of both smart investments and pork barrel projects.

HERE ARE SOME OF THE HIGHLIGHTS:

• 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
also continue
• 5-year “carry-back” of Net Operating Losses for small businesses 
• Temporary relief of Estimated Tax Payments for small businesses 

• 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.