Look at all these tax breaks. You may have noticed the semantic change this week in Washington ? the ‘bailout? plan became the ‘rescue? plan. Indeed, the newly signed legislation offers help for taxpayers as well as Wall Street firms.
In addition to higher FDIC insurance limits through 2009 for bank depositholders, the Senate’s revision of the Wall Street relief package threw in a bunch of tax perks for individuals and businesses. Let’s take a look at some of them.
A higher AMT exemption. The Senate rolled some AMT relief into this rescue package. The Senate bill raises the married filing jointly exemption amount from $66,250 up to $69,950.1 The exemption limit would almost certainly have been raised by the end of 2008 in the usual AMT patch, but it’s nice to have confirmation on this before December.
The return of the IRA charitable rollover. This tax break expired at the end of 2007, and the Senate had voted to extend it on September 23 as part of a large measure to preserve a bundle of tax incentives.2 This week, it was added on to the rescue bill. Once again, taxpayers older than 70? will be allowed to transfer as much as $100,000 from an IRA to a charity without an income tax penalty. This will apply even to such IRA transfers that happen in 2008, according to a senior tax analyst with a tax-publication unit of Thomson Reuters.1
A big tax break for those who drive electric cars. The newly approved rescue package extends a brand new $7,500 tax credit for plug-in electric drive vehicles.3
Extending credits for homeowners. Homeowners who prefer not to itemize their federal income taxes have recently been allowed to take a deduction up to a limit of $1,000 for state and local property taxes. The relief package extends this privilege. Homeowners who upgrade their residences with energy-efficient products can potentially take advantage of tax credits as well.3
Deductions preserved for collegians and teachers. That $250 deduction teachers have been taking for school supplies? Count on it again, thanks to the relief package. College students will still get to take that $4,000 above-the-line deduction for tuition expenses.1
Tax relief for areas hit hardest by storms. The relief package offers regional tax breaks for Louisiana, Texas and certain states in the Midwest. It provides tax-exempt private activity bonds for those states and tax benefits to aid businesses and further the development of low-income housing.3
R&D tax credit extended through 2009. In addition to that extension, the rescue package offers $18 billion in tax breaks for clean energy business and extends tax credits for solar energy producers. There are new tax credits for carbon capture and sequestration demonstration projects for advanced coal electricity generation. Tax credits for biodiesel production will also be preserved through 2009.3
In short, a good day for the taxpayer. Remember that a qualified financial or tax advisor can help you learn about ways to possibly reduce your income, estate or capital gains taxes. What you learn may be pleasantly surprising.

Loran S. Coffman is the founder of Wealth Preservation Strategies, LLC and may be reached on the web at www.WPSinvestments.com, by phone (248) 693-5599, or by email advisor@WPSinvestments.com. See ‘The Science of Financial Health?, Coffman’s exclusive weekly financial column on the web every Wednesday at www.LakeOrionReview.com.