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Posts Tagged Stimulus

Making Work Pay Credit

Jul 22

Posted by Teri in CREDIT, TAX CREDITS, TAXES

The Making Work Pay Credit is still available in 2010. The credit equals the lesser of (1) 6.2% of the taxpayer’s earned income, or (2) $800 for a married couple filing a joint return and $400 for other taxpayers. Married couples with two incomes, individuals with multiple jobs, dependents, pensioners, and workers without valid Social Security numbers should ensure that enough tax is withheld from their pay. The IRS has a withholding calculator on its website which may prove helpful for those who believe their current withholding may not be right.

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FINALLY- The Pennsylvania “Cash for Appliances” Program kicks off..BUT…

Apr 24

Posted by Teri in CREDIT, ECONOMY, ENERGY CREDIT, SAVING MONEY!, TAX CREDITS

We’ve all been waiting for Pennsylvania to kick off its version of the Appliance Cash for Clunkers Program as part of the Federal Stimulus Program. Each state has been permitted to design its own program using its allocation, and PA finally has kicked off its program. But, it is not exactly what we all hoped for.

In Pennsylvania, the rebate program applies exclusively to heating and water heating appliances, with rebates of $200 to $500 for oil boilers and burners (higher efficiency appliances qualify for bigger rebates). Television station WGAL of Pennsylvania’s Susquehanna Valley reported that some consumers and appliances retailers were disappointed at the rebate program’s exclusion of other appliances like washing machines and refrigerators. The decision to only offer rebates for home heating and water-heating equipment is aimed at making federal dollars go farther, as Department of Environmental Protection Secretary John Hanger explained:

This program is going to help as many as 30,000 Pennsylvanians have a lower home heating bill. And when they open that bill up and see that it’s lower, I think that they will appreciate this.

In Pennsylvania, the program is called the “Heating Home Equipment Rebate Program”, and as of today, there is still money available. Rebates can be reserved. And, you may double, triple dip….For example, you may qualify for a store rebate, a PA rebate, and also a Federal tax credit. So, if you plan to improve your Home Heating Equipment, take advantage of this program.

Details can be found at the PA Department of Environmental Website

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Stimulus? ARRA? Same thing!

Nov 14

Posted by Christopher in CREDIT, ECONOMY, HOUSING ASSISTANCE, RECESSION, SAVING MONEY!, SMALL BUSINESS

Uncle sam“Stimulus plan” is the phrase commonly used by people to describe the massive amounts of money the government is spending to help stop the economic freefall.  The other name and the more technical term for this is, The American Recovery and Reinvestment Act of 2009 (ARRA).

The act, passed by Congress and signed by President Obama Feb. 17, 2009, resulted in the government pumping $787.2 billion into the economy to help stop the longest economic downfall since the Great Depression.  The ARRA hopes to prevent a longer recession by using the $787.2 billion on individual and small business tax cuts, investments in a variety of sectors (science, education, public works, etc.), and aid for states and programs serving individuals (unemployment, insurance, etc.).  Basically the main goal of the ARRA is to jump-start the economy, with the $787.2 billion, and hopefully prevent a longer recession.

Goals of ARRA?

  • To preserve and create jobs and promote economic recovery.
  • To assist those most impacted by the recession.
  • To provide investments needed to increase economic efficiency with technological advances in science and health.
  • To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits.
  • To stabilize State and local government budgets

Where is the money being spent? Of the $787.2 billion:

  • $287 billion will be used in a form of tax cuts and breaks for individuals and small businesses (e.g. “Making Work Pay” tax credit, EITC, and First-time Homebuyers Credit).
  • $308 billion will be used for discretionary spending (science, education, energy).
  • $192 billion will be used for direct aid to states and for programs that help individuals in need (i.e. unemployment).

For a complete list of all of the government’s spending allocations please visit ARRA Spending.

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Stimulus for Small Businesses Too!

Nov 5

Posted by Christopher in ECONOMY, RECESSION, SMALL BUSINESS, TAX CREDITS, TAXES

Money treeSmall businesses receive help too!

There are many things that the Stimulus provides to small businesses that may be beneficial: five-year carry back provision, loan guarantees, accelerated depreciation of capital expenses, low tax payments for small businesses and small business owners, and finally, an incentive to invest into small businesses. Talk about a lot of HELP!

Five-Year carry-back provision: This provision allows small businesses to carry-back their 2008 and 2009 losses for 5 years (2003-2004) instead of two years.

Carry-back simply means that small businesses may carry net operating losses back to offset past taxable income.  The definition of a small business in this case is a business that does not exceed revenue of $15 million per year;  if this applies to your business,  then you are eligable for the five-year carry-back provision.  Other businesses that exceed the $15 million per year limit will still be able to utilize the two year carry-backs.

SBALoan guarantees: In order for banks to regain confidence and begin to lend money to small businesses,  the stimulus act increased its guarantees on loans backed by the Small Business Administration (SBA), and reduced/eliminated administration fees for certain kind of loans.  Small businesses that are eligible to receive SBA loans would apply for these loans directly through its lending company, who will ultimately determine whether a small business receives a SBA guarantee or not.  With the Stimulus provsions, small business loans up to $1.5 million are eligible to receive 90% of the requested amount from the SBA- the previous percentage small businesses were allowed to receive was 75%.  This larger guarantee will likely lead to more small businesses receiving a loans, which the government will fund with $375 million. To view the eligibility for SBA and the different types of loans visit SBA.

  • Fun fact: In 2008, small businesses that were start-ups accounted for 35% of all loan guarantees;  minority owned or women owned businesses accounted for 32% and 23% respectively.  Basically if you are a one of the three: start-up business, a minority owned, or women owned business, you receive more loan guarantees than other small businesses.

Capital Expense Write-off and Increased Depreciation Expense: To help small businesses with their tax liabilities, small businesses will now be able to write-off up to $250,000 in capital investments in 2009.  In addition, small business are now allowed to accelerate the depreciation of capital purchases made the previous year. Translation: Small businesses can depreciate items faster, which allows them to receive greater tax deductions now, instead of later.

Lower Estimated Tax Payments: This will require individuals who are small business owners to only pay 90% of last years’ tax liability as estimated taxes, instead of the current /100%110% rate.  This will allow small business owners to retain some extra cash, which does not hurt to have during this economic crisis.

Incentive to Invest In Small Businesses: Investors that help fund small businesses will now be allowed to exclude from taxation up to 75% of their gains if they agree to maintain their investment for a minimum of five years!  By allowing this it should increase the amount of investors willing to invest in small businesses, and the intent is that confident investors will help others, regain confidence in the economy.

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