Tax & Research in a Down Economy.

1. Tax & Research in a Down Economy.

2. Tax Research • This session will demonstrate how to utilize tax research to develop new revenue streams in a down economy. • Technology has changed the way research is being done to increase practitioner efficiency and productivity. Areas to be covered are how to seamlessly scan you tax data and generate engagements directly out of your research tool to better relate to your clients.  Learn how a research tool can generate “smart charts” as a deliverable you can charge your clients for.  Explore the world of research and the ways to expand your practice by obtaining the knowledge and “how to’s” of the experts American Recovery and Reinvestment Act

3. Areas of Change • How ARRA Provides Relief for Individuals • How ARRA Affects Housing and Transportation • How ARRA Affects Higher Education and Healthcare • Recent Changes Affecting Retirement • How ARRA Provides Tax Breaks for Businesses • Estate, Generation-Skipping, and Gift Tax Rules for 2009; and Issues Remaining After ARRA American Recovery and Reinvestment Act

4. Do you know how the new laws affect your clients? Selling your Services via knowledge Utilizing the power of connectivity American Recovery and Reinvestment Act

5. Improve Efficiency and Increase Revenue • According to a recently conducted nationwide survey of accounting firms by CCH: • Among the factors most partners agree on are driving change and the need to improve efficiency and increase revenue • The need for continued growth is driving greater client specialization and firm alliances to expand and enhance client service • Increased efficiency and productivity needs require the accelerated adoption of paperless workflows and technology • Meeting client, firm and employee needs requires anytime, anywhere access to information and knowledge American Recovery and Reinvestment Act

6. Improve Efficiency and Increase Revenue • Increase revenue • Expand practice to include estate and retirement planning services • Improve efficiency • With easy-to-use, up-to-date, and robust research tools to provide anytime, anywhere access to information and knowledge American Recovery and Reinvestment Act

7. Expanding Your Practice • Identify clients • Search current and prior year’s tax returns • Contact these clients to describe the advantages of retirement planning American Recovery and Reinvestment Act

8. Extraordinary Legislation for Extraordinary Times • Federal “economic stimulus” actions begin with late-year 2008 legislation • Laws enact “extenders” to stretch sunset of beneficial rates and credits through 2009 • New 111th Congress passes the American Recovery and Reinvestment Act in response to stock market, employment, housing, and banking crises American Recovery and Reinvestment Act

9. American Recovery and Reinvestment Act of 2009 President Obama signed the American Recovery and Reinvestment Act of 2009 (P.L. 111-5, the ARRA) into law February 17, 2009. • Estimated cost: $790 billion, with nearly $300 billion in tax relief • Impact on Internal Revenue Code: 300+ changes; one-third are tax incentives • Taxpayers affected: • Individual employees and self-employed persons • Home buyers and homeowners • Businesses acquiring equipment or claiming tax credits American Recovery and Reinvestment Act

10. How ARRA Provides Relief for Individuals American Recovery and Reinvestment Act

11. Overview: How ARRA Provides Relief for Individuals • Creates new making work pay credit • Issues one-time $250 benefit to certain retired and disabled Americans • Extends unemployment benefits and provides exclusions from gross income American Recovery and Reinvestment Act

12. Overview Continued • Expands earned income tax credit • Eases qualifications for child tax credit • Provides a patch for the alternative minimum tax American Recovery and Reinvestment Act

13. Making Work Pay Credit This new refundable credit is a feature of the ARRA recovery package based on earned income of employees. • Estimated cost: $116 billion over two years • Effective date: Retroactive to January 1, 2009, for 2009 and 2010 • Excluded individuals: • Single filers having MAGI exceeding $95,000 (phaseout starts at $75,000) • Joint return filers having MAGI exceeding $190,000 (phaseout starts at $150,000 • Dependents • Trusts and estates • Nonresident aliens American Recovery and Reinvestment Act

14. Applying the Making Work Pay Credit • Credit implemented by adjusting employees’ withholding • Maximum credit: • Lesser of 6.2% of earned income (up to $6,452; $12,903 for joint filers) • $400 for individual filers, $800 for joint returns American Recovery and Reinvestment Act

15. One-Time $250 Payment to Certain Nonworkers • Payment no later than June 17, 2009 • Qualified individuals: • Social Security benefit recipients • Railroad Retirement benefit recipients • Disabled veterans • Social Security income recipients American Recovery and Reinvestment Act

16. ARRA Changes to Unemployment Compensation • Benefits of up to $2,400 excludible from gross income in 2009 • Duration of benefits extended to 33 weeks • Weekly unemployment benefits increased by $25 American Recovery and Reinvestment Act

17. Are you communicating the information with your clients and prospects Client Relate Services: Planning Bulletins Services American Recovery and Reinvestment Act

18. How ARRA Affects Housing and Transportation American Recovery and Reinvestment Act

19. Overview: How ARRA Affects Housing and Transportation • Enhances first-time homebuyer credit of the Housing Assistance Tax Act of 2008 • Does not change terms of the nonqu1alifying use applied to home sale gain exclusions • Expands personal credits for residential energy improvement expenditures • Keeps recently added exclusion from taxable income of the amount forgiven in cancellation of debt on home mortgages American Recovery and Reinvestment Act

20. Modifications to First-Time Homebuyer Tax Credit ARRA makes key changes to the first-time homebuyer credit created by the Housing Assistance Act of 2008 applicable only to homes purchased between January 1, 2009, and November 30, 2009: • Increases the credit from $7,500 to $8,000 • Waives the original repayment requirement for the credit • Extends the increased $8,000 credit through November 30, 2009 American Recovery and Reinvestment Act

21. Rules for First-Time Homebuyers Under ARRA • A principal residence may be any of the following: • Freestanding one-family home • Multifamily home used as a principal residence • Houseboat • Mobile home • Condominium • Cooperative apartment • First-time homebuyers in the District of Columbia cannot opt to claim the DC homebuyer credit American Recovery and Reinvestment Act

22. Nonqualifying Use for Home Sale Exclusion • Qualified home sellers may exclude gain of up to $250,000 each ($500,000 for joint filers) from sale of their principal residence (this amount has not changed since mid-1997 and remains at this level post-ARRA) • Exclusion does not apply to post-2008 periods of “nonqualifying use” of property as: • Vacation home • Rental property • ARRA did not change the rules for the exclusion set by Housing and Economic Recovery Act of 2008 American Recovery and Reinvestment Act

23. Income Exclusion for Cancellation of Debt • Qualified cancellation of debt income excludible for mortgage principal subject to: • Maximum of $1 million for single and married filing separately filers • Maximum of $2 million for joint filers • Exclusion applies only to indebtedness incurred for: • Home purchase (first mortgage) • Home building costs • Substantial improvements to main home • Refinancing remaining mortgage used to buy, build, or substantially improve main home American Recovery and Reinvestment Act

24. Research at work Demonstration of effectively utilizing the tools American Recovery and Reinvestment Act

25. Questions Milla.austin@wolterskluwer.com American Recovery and Reinvestment Act