With another tax filing season quickly approaching, I want to inform you of several details included in the recent Emergency Economic Stabilization Act of 2008 that may affect you.  Here’s an overview of the key relief provisions included in the Act:

Additional Child Tax Credit. An increased amount of lower-income earners will be eligible for this credit as the earned income threshold has decreased from $12,050 to $8,500 beginning in 2008.                                                                                                                                            Qualified tuition deduction. The above-the-line tax deduction for qualified higher education expenses is extended through 2009. This deduction provides a benefit whether you itemize or not.                                                                                                                                               Teacher expense deduction. This provision allows teachers a deduction for up to $250 for educational expenses. This provides a benefit whether you itemize or not.                                    

IRA rollover provision. This provision allows qualified taxpayers to make tax-free contributions from their IRA plans to qualified charitable organizations.

Additional standard deduction for real property taxes. The standard deduction for real property taxes for those not itemizing is extended through 2009. Taxpayers who do not itemize can add the lesser of their real estate taxes or $500 ($1000, if married) to the standard deduction.

15-year straight-line cost recovery for qualified leasehold, restaurant, and retail improvements. This new provision allows for improvements put in service before January 1, 2010, to be written off over 15 years, not at the current standard of 39 years.

Residential Energy Efficient Property Credit. The Act has reinstated the expired $500 credit for energy-efficient property such as doors, windows, water heaters, and central air units. This credit is reinstated for the 2009 tax year, so if you’re considering energy-efficient improvements to your home, 2009 is the year to have that done. Individuals are allowed a residential energy efficient property credit for expenditures for qualified solar electric property, qualified solar water heating property, and qualified fuel cell property.  These credits have been extended 8 years through 2016.

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