Items of Interest We here at Susan E Thomas CPA, Ltd feel that an informed client is our best customer. We know that there is a lot of information on the Internet and it can be tough to determine what is valuable.  The Tax Updates link below has some of the new issues you might need to consider for 2009 feel free to save or print the PDF .  Please discuss them with us if you think that they may apply to you. Tax Updates for 2009      Click on the links below to access additional information:     The Making Work Pay Tax Credit   General Information For 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers filing joint returns.  This tax credit will be calculated at a rate of 6.2% of earned income and will phase out for taxpayers with adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly. For people who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes in early spring. These changes may result in an increase in take-home pay. The amount of the credit must be reported on the employee's 2009 income tax return filed in 2010. Taxpayers who do not have taxes withheld by an employer during the year can also claim the credit on their 2009 tax return. It is not necessary to submit a Form W-4 to get the automatic withholding change.  However, an employee with multiple jobs or married couples whose combined incomes place them in a higher tax bracket may elect to submit a revised W-4 to ensure enough withholding is held to cover the tax for his or her combined income. Publication 919   provides additional guidance for tax withholding.

Changes to the Home Sale Gain Exclusion Many taxpayers bought a second home, such as a vacation home, with the intention of later converting the second home into their principal residence. Under pre-2008 Housing Act law, those taxpayers could have excluded up to $250,000 ($500,000 for certain joint filers) upon a later sale of that former vacation home as long as the two-year ownership and use tests for the exclusion were satisfied.   How Earned Income Impacts Your Social Security Benefits If you are a social security beneficiary under full retirement age (currently age 66), an earnings test determines whether your social security retirement benefits will be reduced because you earned more from a job or business than an annual exempt amount.   Required Minimum Distributions Waived for 2009 Taxpayers can be subjected to an onerous excise tax if they take less than the required minimum distribution (RMD) from their retirement plan each year.