McAuley & Crandall, PA

Individual Planning:

What's New? Make sure to check out the year-end newsletter!

American Recovery and Reinvestment Act of 2009 to Help Ease Taxes for Individuals

Higher Education: Hope scholarship credit increases from $1,800 to $2,500 and is available for four years of postsecondary education now instead of the first two. Call us so we can help you plan for your college students. This credit will be phased out for incomes exceeding $90,000 for single and $180,000 for joint filers.
New car sales tax deduction: For the purchase of new cars and light trucks between Feb. 17, 2009, and the end of the year, you may deduct the portion of state and local sales and excise taxes attributable to the first $49,500 of the vehicle's purchase price. The deduction will be phased out for incomes exceeding $125,000 for single taxpayers and $250,000 for joint filers.
The AMT exemption is increased to $46,700 for singles and $70,950 for joint filers
Section 529 plans may buy computers: As long as the beneficary of the plan is enrolled at an eligible education institution, the costs of computers and related technology qualify as higher education expenses.

Taxpayers may Get a Rude Suprise

The new "Making Work Pay" tax credit is helping millions of Americans enjoy a small windfall. However, the government is going to want some of that money back and we'll be in for an unpleasant suprise next spring. The tax credit is suppose to provide up to $400 to individuals and $800 to married couples as part of the massive economic recover package enacted in February. Most works started receiving the credit through small increases in their paychecks. But new tax withholding tables issued by the IRS could cause millions of taxpayers to get hundreds of dollars more than they are entitled to under the credit, money that will have to be repaid at tax time. At-risk taxpayers include: married couples in which both spouses work; workers with more than one job; retirees who have federal income taxes withheld from their pension payments and Social Security recipients with jobs that provide taxable income. For many, the new tax tables will simply mean smaller-than-expected tax refunds next year.

Our advice: Check your federal withholding to make sure sufficient taxes are being taken out of your pay. if you are married and both spouses work, you might consider having taxes withheld at the higher rate for single filers. If you have multiple jobs, you might consider having extra taxes withheld by one of your employers. You can make that request with a Form W-4. Here is a link to the IRS website for a calculator to help you figure withholding.

New Mileage Rates

2009
- Business purposes $.55
- Medical/Moving purposes $.24
- Charitable purposes $.14
2010

Business purposes $.50
Medical/Moving purposes $.165
Charitable purposes $.14