The “Emergency Economic Stabilization Act of 2008” may be good or bad, depending on your point of view. Time will tell. But along with all the pork did come a few tax relief measures. Here are a few of the tax nuggets recently signed into law:
• State and local sales taxes still available for deduction. The law change retroactively extends this election so it applies for tax years 2008 and 2009.
• The deduction for higher education expenses has been retroactively extended so that it also applies for tax years 2008 and 2009. This covers, generally, qualified tuition and related expenses for higher education. The maximum deduction is $4,000 for joint filers whose adjusted gross income does not exceed $130,000.
• Folks can count on a two year extension for nontaxable IRA transfers to eligible charities. Until last week, the opportunity for eligible taxpayers to make nontaxable IRA transfers to eligible charities would not apply to such transfers made in tax years after 2007. This one, too, has been extended for two years.
Transfers of as much as $100,000 from an IRA to a qualified charity will continue to be excludable from adjusted gross income, thus not enlarging the latter for purposes of measuring other limitations applicable to itemized deductions and exemptions.
• Fifteen-year write-off for “qualified leasehold improvements” and “qualified restaurant property” has also been extended for two years.
Previously, qualified leasehold and restaurant improvements had to be placed in service before Jan. 1, 2008, to qualify. So, those of you making these sorts of improvements can continue to qualify for a 15-year depreciable life, rather than the longer, more onerous write-off period which would otherwise apply.
Consult your tax adviser: This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.