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Gregory J. Cook, EA, CPA Accredited Tax Advisor Past President Alabama Society of Enrolled Agents Past President Alabama Association of Accountants

Tax Brackets 2011	Single	Married Filing Jointly	Head of Household
10% Bracket	$0 – $8,500	$0 – $17,000	$0 – $12,150
15% Bracket	$8,500 – $34,500	$17,000 – $69,000	$12,150 – $46,250
25% Bracket	$34,500 – $83,600	$69,000 – $139,350	$46,250 – $119,400
28% Bracket	$83,600 – $174,400	$139,350 – $212,300	$119,400 – $193,350
33% Bracket	$174,400 – $379,150	$212,300 – $379,150	$193,350 – $379,150
35% Bracket	$379,150+	$379,150+	$379,150+

The American Recovery and Reinvestment Act (ARRA) - 2009 Tax Law Changes That May Affect You for Years to Come ...

The American Recovery and Reinvestment Act (ARRA) provides numerous tax incentives for individuals; First-Time Homebuyer Credit Expands. Homebuyers who purchase in 2009 can get an $8,000 credit with no payback requirement. Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes paid as an "above the line deduction" even if you don't itemize. Enhanced Tax Credits for Tax Years 2009, 2010.

A new higher education benefit, increased earned income tax credit, additional child tax credit and the American Opportunity Credit. Up to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals that will receive more than this amount should check their withholding because the excess will be taxable. $250 for Social Security Recipients, Veterans and Railroad Retirees. The Economic Recovery Payment will be paid by the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board. Energy Efficiency and Renewable Energy Incentives. Too much to list here. Health Coverage Tax Credit. The credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.

ARRA - Accountability Board ARRA - Assistance for Communities ARRA - Assistance for Farmers ARRA - Assistance for Firms ARRA - Assistance for Unemployed Workers ARRA - Assistance for Vulnerable Individuals ARRA - Assistance for Workers ARRA - Borrowing Authority ARRA - Broadband Technology Opportunities Program ARRA - Build America Bonds ARRA - Cobra Premium Assistance ARRA - Commerce, Justice, Science and Related Agencies ARRA - Department of Defense ARRA - Diplomatic Programs ARRA - Economic Recovery Payments ARRA - Electric Vehicles ARRA - Energy and Water ARRA - Energy Conservation Incentives ARRA - Energy Incentives ARRA - General Provisions ARRA - General Tax Relief ARRA - Government Accountability ARRA - Government Financial Services ARRA - Health Care Quality ARRA - Health Coverage Improvement ARRA - Health Information Technology ARRA - Homeland Security ARRA - Independent Advisory Panel ARRA - Infrastructure Financing ARRA - Labor and Education ARRA - Land Management ARRA - Limits on Executive Compensation ARRA - Medicaid Incentives ARRA - Medicare Incentives ARRA - Medicare Provisions ARRA - Military Construction and Veterans Affairs ARRA - Oversight Requirements ARRA - Premium Assistance for Cobra Benefits ARRA - Privacy and Security Provisions ARRA - Promotion of Health Information Technology ARRA - Recovery Zone Bonds ARRA - State Fiscal Relief ARRA - State Fiscal Relief ARRA - Tax Credit Bonds for Schools ARRA - Tax Incentives for Business ARRA - Tax Provisions ARRA - The Act ARRA - Transportation Housing Urban Development ARRA - Unemployment Insurance

Information for Individuals Can you benefit from Recovery Act tax credits? Many of the Recovery Act provisions are geared toward individuals: Homebuyer Credit. Homebuyers who purchased by April 30, 2010, and settled by Sept. 30, 2010, may be eligible for a credit of up to $8,000. Documentation requirements apply. See the first-time homebuyer page for more. COBRA. Workers who lost their jobs between Sept. 1, 2008, and May 31, 2010, may qualify for reduced COBRA health insurance premiums for up to 15 months. Education benefits. The American opportunity credit and enhanced benefits for 529 college savings plans help families and students find ways to pay higher education expenses. Home energy efficiency and renewable energy incentives. See what you can do to reap tax rewards. Earned Income Tax Credit. The EITC was bigger in 2009 and 2010. Additional child tax credit. More families qualified for the ACTC in 2009 and 2010. Making Work Pay Tax Credit. This credit meant more take-home pay for many Americans in 2009 and 2010. $250 for Social Security Recipients, Veterans and Railroad Retirees. The Economic Recovery Payment was paid by the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board in 2009 or, in some cases, 2010. Money Back for New Vehicles. Taxpayers who bought new cars and certain other new vehicles in 2009 can deduct the state and local sales taxes they paid as well as other taxes and fees they paid in states with no sales tax. Increased Transportation Subsidy. Employer-provided benefits for transit and parking rose in 2009. Up to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals should check their tax withholding. Health Coverage Tax Credit. This credit increased from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible. Information for Businesses The following Recovery Act provisions affect businesses: Making Work Pay Tax Credit. The 2010 withholding rates, contained in Notice 1036, reflected reduced withholding. An optional withholding procedure was available for pension plan administrators. Work Opportunity Tax Credit. This expanded credit added returning veterans and "disconnected youth" to the list of new hires that businesses may claim.

COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941.

Energy Efficiency and Renewable Energy Incentives. See what businesses can do to reap tax rewards.

Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Find information on carrybacks, an expanded section 179 deduction and other business-related provisions. The Worker, Homeownership And Business Assistance Act Of 2009 (WHBAA) expanded the five-year NOL carryback to most businesses.

Municipal Bond Programs. New ways to finance school construction, energy and other public projects.

The American Recovery & Reinvestment Act of 2009 (ARRA) created several new types of tax-exempt bonds and tax credit bonds under the Internal Revenue Code. Of particular note, the ARRA created new tax incentives for certain taxable governmental bonds called Build America Bonds and Recovery Zone Economic Development Bonds whereby the governmental issuer of such bonds may elect (in lieu of issuing tax-exempt bonds) to receive a direct refundable credit payment from the Federal government equal to a percentage of the interest payments on these bonds.

Under the American Recovery and Reinvestment Act (ARRA), more families will be eligible for the additional child tax credit because of a change to the way the credit is figured.

Taxpayers who cannot take full advantage of the child tax credit because the credit is more than the taxes they owe may receive a payment for some or all of the credit not used to offset their taxes. It is a refundable credit, which means taxpayers may receive refunds even when they do not owe any tax.

ARRA reduces the minimum earned income amount used to calculate the additional child tax credit to $3,000. Before ARRA, the minimum earned income amount was set to rise to $12,550. Reducing the amount to $3,000 permits more taxpayers to use the additional child tax credit and increases the amount of the payments they may receive.