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McCaskill: Stimulus Tax Breaks Will Save Missourians Money in 2009

Economic Recovery Act includes multiple tax benefits for Missouri families and businesses

April 20, 2009
WASHINGTON, D.C. – As people prepared their taxes this year, many families and small businesses across America were hoping to find ways they could save money amid the economic crisis. U.S. Senator Claire McCaskill wants Missourians to know about all the ways the American Reinvestment and Recovery Act will help keep a little extra cash in their pockets over the coming months and during the next year’s tax season. Approximately 40 percent of recovery spending was in the form of tax relief and one third of the total spending goes back into the pocket of American taxpayers.
First, Missourians will see extra money in their paychecks each week as part of the Making Work Pay Credit.  Furthermore, tax breaks are available for everything from buying a new home or car to sending a child to college.  People receiving social security or veterans benefits, who may not normally file tax returns, will see a one-time $250 increase in their benefits. Also, small businesses across the country can benefit from tax credits that are intended to spur investment and get the economy moving again.
The recovery plan provides a number of tax breaks for Missouri families including:
  • Making Work Pay Credit: Americans will see up to an additional $400 per working person over the course of the year in tax credits included in their paychecks. The refundable credit offsets the employee’s portion of payroll taxes.
  • First-Time Homebuyer Credit: First-time homebuyers can receive an $8,000 tax credit for the purchase of a new home between January 1 and December 1 of 2009.
  • Sales Tax Deduction for New Vehicles: Taxpayers can deduct state and local sales and excise taxes paid on the purchase of new cars, light trucks, recreational vehicles, and motorcycles bought in 2009.
  • ‘American Opportunity Credit’: To make college education more affordable, taxpayers will receive a tax credit of up to $2,500 for the cost of tuition and related expenses.
  • One-time increase in social security, veterans, and retirement benefits: Social Security and veterans’s benefits recipients will receive a one-time increase of $250 in their social security or veterans’ benefits checks without having to file a tax return for 2008. Some government retirees (including Missouri teachers and others with state pensions not covered by Social Security) will also see a one-time payment of $250.
  • Suspension of taxes on the first $2,400 in unemployment benefits.
  • Increase the tax credit for improving energy efficiency of homes: Homeowners can now receive up to $1,500 or 30 percent of expenditures for improving energy efficiency of their homes. 

  • Protects 26 million taxpayers from being hit by the Alternative Minimum Tax.   308,000 Missourians will be protected from a tax hike through this provision.

  • Missouri businesses will benefit from the following tax credits:
  • Extends bonus depreciation: Companies making capital investments through 2009 can write-off the value of those investments from their taxes more quickly by permitting those companies to immediately write-off fifty percent of the cost of depreciable property.
  • Extends small business expensing: In 2009 and 2010 small businesses can write-off capital investments of up to $125,000 immediately
  • Small businesses “carry back”: Currently, small companies that lose money this year are entitled to tax refunds on any profits made in the previous two years.  The Recovery Act temporarily extends the period to the previous five years for businesses with sales under $15 million a year.
  • Capital gains tax breaks: To incentivize people to invest in small companies, individuals investing in small businesses in 2009 and 2010 are eligible for an increased capital gains tax break.
For more information on recovery tax credits click here.
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