February, 2009

H.R. 1, the “American Recovery and Reinvestment Act of 2009”—the Recovery Act—was signed into law by the President on February 17, 2009. This new law includes many business tax breaks, such as extended bonus depreciation, boosted expensing, and tax-deferred debt forgiveness income on the repurchase of qualifying debt. Tax breaks for individuals include a refundable “making work pay” stimulus credit, enhanced child tax credit and EITC, an improved homebuyer credit, a new deduction for state sales and excise taxes paid on new vehicles, and a sweetened higher education credit. There's a one-year AMT patch as well.

The Recovery Act is over 1,100 pages and covers an extraordinary number of tax relief provisions. However, I'm writing to give you an overview of the more widely applicable tax changes specifically effecting both individuals and families and small businesses.