The massive new “American Recovery and Reinvestment Act of 2009” hammered out by Congress—and promptly signed by President Obama on Feb. 17—is bursting at the seams with tax breaks designed to help both individuals and small businesses. Generally, the tax provisions are retroactive to Jan. 1, 2009.
Here’s a roundup of 14 tax strategies under the new law:
Tax breaks for individuals
1. Put new tax credit to work. The centerpiece of the president’s tax plan is the new “Making Work Pay Credit.” For 2009 and 2010, a worker can claim a credit equal to the lesser of 6.2% of earned income or $400 for single filers; $800 for joint filers. The credit phases out at a 2% rate if your AGI is $75,000 or above for single filers; $150,000 for joint filers.
Tip: The credit also is available to self-employed individuals. Apply it to your net earnings from self-employment activities.
2. Pocket one-time tax payment. The new la...(register to read more)