Tax Relief Blog

President Announces Middle-Class Tax Relief and Retirement Incentives

President Obama plans to propose a near doubling of the Child and Dependent Care Tax Credit for middle-income families earning under $85,000, establishment of a system of automatic 401(k) enrollments and simplifying and expanding the Saver’s Tax Credit. These initiatives will be included in the president’s fiscal year 2010 budget and are among several recommendations made by the Middle Class Task Force chaired by Vice President Biden and announced by Obama and Biden on January 25.

The administration proposes to increase the tax credit rate for child and dependent care expenses from 20 percent to 25 percent for families making under $85,000 a year. The credit is phased down to 20 percent for families earning between $85,000 and $115,000, noted a senior administration official. Families could claim up to $3,000 in expenses for one child and $6,000 for two children. The maximum credit for a household with two children earning below $80,000 annually would increase from $1,200 to $2,100 under the proposal.

IRS Announces Qualified Disaster Treatment for Haiti

The Internal Revenue Service today issued guidance that designates the earthquake in Haiti in January 2010 as a qualified disaster for federal tax purposes. The guidance allows recipients of qualified disaster relief payments to exclude those payments from income on their tax returns. Also, the guidance allows employer-sponsored private foundations to assist victims in areas affected by the January 2010 earthquake in Haiti without affecting their tax-exempt status.

Charities usually fall into one of two categories — public charities or private foundations. Under the tax law, a private foundation that is employer-sponsored may make qualified disaster relief payments to employees affected by a qualified disaster. These payments generally include amounts to cover necessary personal, family, living or funeral expenses that were not covered by insurance. They also include expenses to repair or rehabilitate personal residences or repair or replace the contents to the extent that they were not covered by insurance. Again, these payments would not be included in the individual recipient’s gross income.

Tax Relief – Short List

Tax relief is a term that refers to providing tax problem resolution and relief from the fear and burden of the mounting tax liability. Tax relief is provided on a federal and state level.

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IRS has filed $79,000 lien against Gov. Schwarzenegger, records show

SOURCE: Los Angeles Times

A spokesman for the governor says the matter is related to a paperwork discrepancy and has nothing to do with the payment of taxes.

IRS Issues Final Regulations Governing Installment Agreements

The IRS has issued final regulations relating to the payment of tax liabilities through installment agreements. The regulations reflect changes to the law made by the Taxpayer Bill of Rights II (P.L. 104-168), the Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105-206) and the American Jobs Creation Act of 2004 (P.L. 108-357). The final regulations generally adopt proposed regulations issued in March 2007 (NPRM REG-100841-97), with revisions to two provisions made in response to comments received by the IRS. The regulations are effective November 25, 2009.

The final regulations adopt without change procedures set forth in the proposed regulations regarding submission and consideration by the IRS of proposed installment agreements, and acceptance, form and terms of installment agreements. The regulations provide that a proposed installment agreement must be submitted according to the procedures prescribed by the IRS, and becomes pending when it is accepted for processing. An installment agreement request is not accepted until the IRS notifies the taxpayer or the taxpayer’s representative of the acceptance.