Memphis attorney Vincent Perryman discusses Tax Law with Gus Wilson

Memphis attorney Vincent Perryman discusses Tax Law and the Emergency Economic Stabilization act of 2008 or the Bail out plan with Gus Wilson. The bail out plan entails many tax refunds for businesses and individuals. This is the biggest tax law passed since 2001. The Financial Market Rescue plan entails 3 major effects. One is if a Memphis Business has assets and are in trouble with bad loans the government will buy their loans if the company is a member of the TARP (Troubled Asset Relief Program). They will then in turn be able to dictate the income of the CEO of the company. The second effect is the Fanny and Freddie stock purchases that affects only a few key people, community banks and other organizations are allowed to deduct capital gain losses through the federal or Freddie stocks they own against ordinary income. Which means instead of waiting until they have a capital gain to offset those losses they can take them in the current year against any kind of gain they have. The extended exclusion for home owners with a mortgage. Which means if you default on the loan and the bank has to take over the loan and they have to liquidate the house to cover the loan, if there is a gap between what they make and how much is owed. In the past it would have been income to the homeowner that they would have to pay taxes on. Now it just goes away. The gap on the mortgage default is extended until 2012. For this to work is it has to be the primary residence and its only up to 1 million dollars in value. With the bailout plan some of the tax provisions for the individuals are the AMT Patch. The AMT Patch is an Alternative Minimum Tax. This provides high income tax payers with a floor for a minimum amount of taxes they have to pay. It restricts a lot of add backs. The bailout package affects the middle income tax payers by raising the threshold in order to prevent them from paying the AMT. To be excluded from paying the AMT the numbers for married couples filing jointly are 70,000.00, single 46,200.00, and married filing individually 34,975.00. If you feel you are in the AMT tax category consult an accountant to discuss your options.

The AMT patch of the Emergency Economic Stabilization act of 2008 is only good until December of 2008. Moving forward the patch has to be fixed by the existing president. Some new tax provisions in the Emergency Economic Stabilization act are extensions on sales tax. This benefits Memphis, Tennessee residents most because there is no payroll tax on Tennessee payroll. Memphis residents only pay a Hall tax on Dividends and investments. The thresholds are 2500.00 for the Hall tax in Memphis, Tennessee for a married couple. Most people in Memphis, Tennessee are able to deduct sales tax as an additional deduction for schedule A. There are two ways to calculate the sales tax spent throughout the year in Memphis, Tennessee; use the government sales tax table based on Adjusted Gross Income and multiple through by all the dependents in the household. The other alternative is to save all the receipts from purchases in Tennessee and add them up to calculate the amount of sales tax spent in a year. The sales tax on Cars, boats, etc... can also be added to the deduction. The tuition deduction was also extended in the Emergency Economic Stabilization act until 2009. The tuition deduction allows Memphis, TN tax payers to take an above the line deduction. Which means you are allowed to calculate the deduction in the Adjusted Gross Income. The maximum amount for tuition deduction is 4000.00. If you are an individual you are an individual and you make 65,000.00 you are not allowed to deduct the tuition, however if you are married you are allowed to deduct the tuition if you make up to 165,000.00 a year. There is a real estate tax deduction included in the Emergency Economic Stabilization act that allows Memphis, Tennessee residents to deduct some of the real estate tax paid on the residents on top of the standard deduction. If you are a single tax payer you are allowed to add 500.00 to the deduction and 1000.00 if you are married. The teacher's classroom expense has been extended to 2009 as well. This expense allows Memphis, Tennessee teachers to deduct from their Adjusted Gross Income any out of pocket expenses they might use for teaching aids. This would include chalk, books, and other teaching aids. The tax free IRA contributions was also extended. This allows a Memphis, Tennessee resident to make a contribution to a 501C3 charity of up to 100,000.00 dollars from their IRA in order to reduce their estate.

In the Emergency Economic Stabilization act the definitions and benefits of having a child and receiving the child benefit have improved for Memphis, TN residents. In addition the Emergency Economic Stabilization act added some benefits to Memphis businesses. It allowed a bonus depreciation value of 50 percent which means that any asset that has a 20 year or less life can be written off immediately. If assets fall into the 179 category a Memphis, TN resident is allowed to deduct them until their profits equal 0. The Act also states that if a purchase qualifies as a lease hold improvement it decreases the 39 year life to a 15 year life. That makes this deduction more reasonable to write off. Some unusual business deductions are changes to the deductibility of food and equipment for Memphis charitable organizations. Other additions are extensions on disaster relief projects. Some energy efficient deductions have been created for both Memphis businesses and Memphis individuals. When filing taxes in Memphis anything above having a W2 is a good idea to consult with a Memphis tax advisor. If a W2 is the only income a Memphis individual has, then the individual can use online or software for tax filing. Once a Memphis, TN resident gets into Schedule Cs, investments, and large quantities of assets it is usually a good idea to consult a Memphis tax advisory to get the full tax breaks available to them. Schedule Cs are being scrutinized more since individuals are abusing the Schedule C process, this makes it a good idea for a Memphis business filing as a schedule C to consult a Memphis tax advisor.