Tax Increases ARE Coming~Unless Congress Takes Action! (Part 6)

Tax Cuts Are Scheduled To Sunset! (Part 6) I wish that I could tell you that this is my last post on the subject, but the truth is that there are still more tax breaks that are scheduled to expire this year unless our congress re-instates them before year’s end. If these “Sunset Rules” are allowed to become extinct, we can ALL expect to pay more in taxes to our federal government~Plain and Simple. Here are some of the changes we can expect if nothing is done: Coverdell Accounts – The contribution limit to Coverdell education savings accounts will be reduced from $2,000 per year to $500, tax-free distributions will no longer be allowed for elementary and secondary education (only post-secondary education), education credits will not be allowed in the same year as a Coverdell distribution, and contributions cannot be made to a Coverdell account and a Sec 529 plan in the same year. Home Energy Improvement Credit – The $1,500 credit for making improvements that increase the energy efficiency of a taxpayer’s home expires after 2010. Hybrid & Lean Burn Credits – Most manufacturers have reached the 60,000 unit maximum after which the credit is reduced or no longer allowed. As a result, this credit will have very limited application in 2011. Making Work Pay Credit – Expires after 2010. This refundable credit of $800 for joint filers and $400 for unmarried individuals phases out for higher-income taxpayers so the loss of the credit impacts middle- to low-income taxpayers. As you can see, these tax credits affect many middle and lower income taxpayers. It’s my hope that congress will act SOON! E-File Florida is very happy to help you with questions regarding these “Sunset Rules”. Feel free to contact our office by calling 954-583-8534 or by email at info@efileflorida.com. You can also visit us on the Internet at http://www.efileflorida.com for more great tax tips and articles. IRS CIRCULAR 230 Required Notice – IRS regulations require that we inform you as follows: Any Federal tax advice contained in this communication (including any attachments) is not intended to be used and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction as tax related matter(s). Esther Hastings, EA E-File Florida helps individuals and small business owners to lower their tax bills and maximize their tax refunds. We actually enjoy getting to know our clients and have built a solid reputation of delivering excellent personal service while maintaining the highest level of integrity within the tax preparation industry. We welcome the opportunity to make you a Raving Fan!

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