Tuesday Tax Time: The Worker, Homeownership, and Business Assistance Act of 2009

There were some great things passed for small businesses and individuals in the recent tax act passed on November 6, 2009.  Check out a few points that may apply to you, dang it (by the way, enjoy the pic of the Mayan changing table to the left):

1.  Extension of First-Time Home Buyer’s Credit. The $8k credit has been extended!  You can now buy a new home until April 30, 2010, and all you have to do is enter into a binding agreement by then (you have until July 1, 2010 to actually close on the house).  And your adjusted gross income can be higher and still claim the credit.  Before, if you made a certain income, then you were restricted from getting the credit.  Now that income limit is higher.  Income limits for single home buyer’s used to be $95k, and now it’s $145k.  Income limits for joint filers used to be $170k, and now it’s $245k.

2.  Extension of Home Buyer’s Credit to non-First-Time Home Buyers. After November 6, 2009, if you’ve used your primary residence 5 consecutive years out of the last 8, then you’ll be able to move up to a new home with a refundable $6,500 tax credit.  NOTE: you have to attach a copy of the closing statement to your tax return now.

3.  Loss Carryback for Small Businesses. No matter how big your company is, you can now carryback any losses generated in this year (or generated in 2008) back 5 years earlier to claim a refund against a more profitable year.  5 years is a long time, so that should boost the cash flow if you are generating losses but had profits in earlier years.  If you took TARP money, then you are not eligible – the way it should be.

4.  Penalties for S Corps and Partnerships that DO NOT file their tax returns on time. Beware: if you don’t file your business tax returns on time, you will be penalized $195 per partner.  Yikes.

Thanks, Jason M. Blumer, CPA

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