700 Billion Bailout bill H.R. 6049: Tax question ???

[KCI]

There was an article in the USA Today (10/2/08) that explained the Senate Plan's Provisions of the subject bill as passed. I have a question on one of provisions and can find no info on the web that explains it.
This is the provision in question: Extends a tax break that lets homeowners who don't itemize deduct up to $500 in property taxes a year, or $1000 if they're married and file jointly."
I don't remember ever seeing or using this tax break in past years and can't find anything about it in the current H.R. 6049 bill as passed by the Congress. It was my understanding that the House passed the Bill without any changes from the one passed by the Senate.
Hope someone can help. This would be a great tax break for us.
KCI's Wingman

 

[Dave M]

Yes, there were some changes from the original bill to the one that was passed. The primary change was to include the various tax break extensions, such as the one you mention.

The provision allowing a property tax deduction for those who don't itemize was enacted as part of the earlier Housing Assistance Tax Act of 2008 and the deduction applied only for 2008. The bailout bill extends that, but I don't know how long the extension is for. I haven't seen the language yet.

 

[riverdees05]

Was the changing of the AMT part of the bill and what does it do?

 

[Dave M]

The only wording I have seen thus far is that the bill "extends AMT tax relief for individuals".

 

[Tia]

We did turbo tax and don't have enough deductions to itemize, but don't recall this, but is that because we have not yet filed for 2008 right?

Yes, there were some changes from the original bill to the one that was passed. The primary change was to include the various tax break extensions, such as the one you mention.

The provision allowing a property tax deduction for those who don't itemize was enacted as part of the earlier Housing Assistance Tax Act of 2008 and the deduction applied only for 2008. The bailout bill extends that, but I don't know how long the extension is for. I haven't seen the language yet.

 

[Dave M]

Here is some more info....

The AMT exemption was $44,350 for singles and $66,250 for married couples in 2007 and was set to go down to $33,750 and $66,250 respectively for this year. The bill increases the 2008 exemption to $46,200 for singles and $69,950 for married couples. If no additional legislation is passed, the exemption will go down for 2009.

The property tax provision mentioned above is extended through 2009.

The bill also reinstates tax credits for energy efficient home improvements.

Some other individual tax items in the bill are an enhanced child care credit for very-low-income taxpayers, an extension of the higher education tuition deduction through 2009, an extension of the option to deduct sales and use taxes instead of state income taxes through 2009, an extension of the teacher -related deduction for classroom expenses through 2009, and an extension through 2012 of the provision generally excluding the income that would normally result from cancellation of debt on a foreclosed home with a mortgage.

 

[Dave M]

We did turbo tax and don't have enough deductions to itemize, but don't recall this, but is that because we have not yet filed for 2008 right?

That's correct. The deduction wasn't available for 2007 and the provision was first enacted earlier this year.

 

[KCI]

Thanks Dave M
When I saw that the tax break I mentioned earlier in this thread was extended, my first thought was "how could I have missed that deduction in the past and how many years did I miss it ?" Now you have cleared up my confusion by saying the tax break was originally scheduled for the year 2008 and was extended to include 2009. That will be a big help for those two years. They must be planning a new line on the 1040 for the deduction.
KCI's Wingman