fliprent

So far I like what I’ve seen from the American Recovery and Reinvestment Act (ARRA) signed by President Obama last Tuesday.   From a Tax perspective it appears to contain some very good relief for the average American citizen.  Some of the highlights from the new plan include a new refundable credit of up to $800 for lower and middle income America.  Unless you make more than 95k single or 190K MFJ, you should qualify for this credit.

 Also included in the ARRA economic stimulus plan is an expanded Hope Credit. The new credit is called the American Opportunity Tax Credit.  The new credit can be taken for all 4 years of college instead of the first two and has been increased to a maximum of $2500.   The best part of this credit may be that up to 40% of the credit is refundable.  This means that it can be added to your refund or perhaps even result in a refund even when the taxpayer would have otherwise owed.  Also parents with Section 529 plans for their kid’s college will be happy to know that computers and Internet access are now considered qualified higher education expenses for purposes of the section 529 distributions.

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