The recent Tax Extenders and AMT Relief Act of 2008 (Extenders Act) provides extensions for several popular tax breaks and the addition of several new relief provisions, including disaster-area tax relief. Following is an overview of some of the key provisions for individuals and business owners in the new legislation:
• College Tuition Deduction. The above-the-line deduction for up to $4,000 of college tuition and related fees was retroactively restored for 2008 and extended through 2009.
• Optional Sales Tax Deduction. The optional itemized deduction for general state and local sales taxes was retroactively restored for 2008 and extended through 2009.
• Additional Standard Deduction for Property Taxes. The new (for 2008) standard deduction for non-itemizers of up to $1,000 for married joint-filers ($500 for others) was extended through 2009.
• Educator Expense Deduction. The above-the-line deduction for up to $250 of personal expenditures by teachers and other school employees was retroactively restored for 2008 and extended through 2009.
• IRA Rollover Provision. The provision allowing qualified taxpayers to make tax-free contributions from their IRA plans to qualified charitable organizations is extended through 2009.
• 15-year Cost Recovery. The 15-year write-off for qualified leasehold, restaurant and retail improvements is extended through 2008.
• S Corporation Charitable Contributions of Property. Favorable Subchapter S basis rules for gifts of appreciated property are extended through 2009.
• Disaster Relief. Included in the new legislation are Midwestern disaster area tax relief and a new tax relief package for victims of all federally declared disasters occurring after December 31, 2007, and before January 1, 2010.
Michael Green of Michael L. Green Tax and Financial is an Enrolled Agent, and a Certified Financial Planner in the Valencia Industrial Center. He can be reached, by calling 661-257-4111.