During the economic recession, it is a primary objective of the government to institute boosts to the economy, as well as provide aid and assistance to private individuals, businesses, and corporations. There have been several previous related bills, such as the Taxpayer Relief Act of 1997. This Act, which includes provisions that highlight tax breaks for families, students, and businesses, made more than 800 revisions to existing tax codes, with some of these revisions being made applicable ASAP, some others retroactive, and some taking effect only in 1998 or later.
More recently, some representatives have introduced the Tax Relief Act or HR 470. Here is some brief information that outlines the significant elements and features of this Tax Relief Act:
Background. The Tax Relief Act (HR 470), also known as The Economic Relief and Middle-Class Tax Relief Act of 2009, is sponsored by New Jersey Representative Scott Garrett along with 83 co-sponsors. In essence, this act aims to permanently institute the cutback on taxes that were ratified by 2003’s Jobs and Growth Tax Relief Reconciliation Act. It works on the principle that a boost in today’s economy should come from the private sector. It was introduced to the American House of Representatives on January 13, 2009, and has since been referred to the Committee on Ways and Means along with the House of Appropriations, for further study.
Features and highlights. In general, HR 470 aims to provide stimulus to the economy by enhancing individual and corporate spending capacities through a decrease in corporate and individual tax liability. Some of the specifics include the following: permanent reduction of federal income tax rates by 5%; permanent increase of the child (under 17) tax credit from $1,000 to $5,000; lifts the penalties on premature withdrawals from 401(k) and IRA; and increases tax deductions on student loans/continuing education expenses by 50%. There are also provisions benefiting research and development.
Some reviews. Though HR 470 is definitely a big help in reducing expense costs for the typical American taxpayer, it only focuses on middle-class and employed families and individuals. It also aims to increase corporate income by allowing companies to keep more of what they earn through reduction of corporate taxes. However, it does not significantly address issues concerning the unemployed sector, and neither does it offer high-impact solutions to inject more stimulus into a down economy.
Application. To determine how you can fully benefit from current tax relief acts, it’s a good idea to conduct some in-depth research on the specifics of such acts (such as checks and refund stipulations) and to find out what they mean to you. You can utilize tools such as an online tax calculator from H&R Block to compute the tax breaks and credits you are eligible for. It is also a good idea to benefit from tax advice from professionals
These are just some of the basic details regarding the Tax Relief Act passed by Representatives of Congress. Remember, one important quality you should adopt during the recession is being able to follow government efforts to give aid to you as a taxpayer. Good luck!