Tax Relief and Health Care Act of 2006

On December 20, 2006, President Bush signed into law the "Tax Relief and Health Care Act of 2006." This new act extends several tax provisions that had expired at the end of year 2005.

Some major highlights of the new tax law are:

• Extension of "State & Local Sales Tax Deduction" for tax years 2006 & 2007

• Extension of the "Above-the-Line Tuition & Fees Deduction" for tax years 2006 & 2007

• Extension of the "Teacher's Classroom Expense Deduction" for tax years 2006 & 2007

• Extension of the "Research", "Work Opportunity" & "Welfare-to-Work" tax credits for tax years 2006 and 2007

• Extension of the "15-Year Recovery Period for Leasehold & Restaurant Improvements" for tax years 2006 & 2007

• Extension of the "Election to Treat Non-Taxable Combat Pay" as earned income for calculating the earned income credit (EIC) for tax years 2006 & 2007

• Enhancements of Health Savings Accounts

• Extension of several energy tax incentives

• Extension of the availability of Archer Medical Savings Accounts (MSA's) for tax years 2006 and 2007

• Extension of the District of Columbia first-time homebuyer tax credit

• New deduction for certain mortgage insurance premiums (PMI) on personal residence