Tax Credits

Gov. Arnold Schwarzenegger, a former movie actor, has been trying for years to get tax credits to keep California's signature industry at home. He got his wish early Thursday when the Legislature approved tax credits for film and television productions as part of an economic stimulus provision of the new state budget. The credits -- capped at $500 million over five years -- are modest compared with those offered by other states.

If you're paying for a college education, you may need an advanced degree to figure out how to claim federal tax breaks for those expenses. Congress in recent years has approved myriad special credits, deductions and other tax breaks for people paying tuition bills and related costs, and new breaks and twists were added in the recent stimulus bill. The tax breaks can be generous, saving you as much as $2,500 per student.

Can free parking in Los Angeles help to stem the migration of TV and film production to other cities and states? Probably not. But that most coveted of Los Angeles benefits was one of a series of recommendations adopted Wednesday by the L.A. City Council aimed at making it easier for producers to film locally and discouraging them from taking their business elsewhere. Among the recommendations are to consider a tax credit for building owners who make their properties available for filming and a refund of sales tax paid by production companies when at least 75% of the filming is done within the city.

You may not like how your consulting career was born, but there are some benefits to being your own boss, not the least of which are federal income tax breaks. The moment you join the ranks of the self-employed, you get access to dozens of tax deductions and credits that aren't available to other working stiffs. Here are a few that can help get your consulting business rolling and save you a fortune next April. -- Hire your kids Under normal circumstances, kids are expensive.

That tax credit provided by the federal stimulus package may come just in time -- to pay for new levies imposed by the state of California. A single person making less than $75,000 a year would take home an additional $400 per year under the federal plan passed by Congress, and a couple making less than $150,000 would get $800.

Norman Thaddeus Vane was just four minutes into his speed-dating matchup when he fell in love . . . with Palmdale. "I'm going to use an old gas station and cafe there that I just found out about," the veteran filmmaker said. "Eighty percent of the movie can be shot at that location." Vane and 75 other studio and TV production executives, independent producers and location scouts were learning Thursday about movie-making opportunities in cities and counties across California.

You don't have to be an environmentalist, or even a believer in global warming, to support tax credits for renewable energy -- solar and wind power are clean, sustainable alternatives at a time when prices for fossil fuels are soaring. Yet congressional Republicans and the Bush administration are willing to let existing credits expire because they don't want to close a tax loophole for multimillionaire hedge-fund managers.

Barack Obama continued his courtship of a crucial voting bloc in the coming election, using a Sunday appearance in front of a Latino civil rights and advocacy group to unveil a new element of his economic plan. Speaking to more than 2,000 members of the National Council of La Raza in San Diego, the Illinois senator said he intended to give tax credits to small businesses that provided their employees with health insurance.

Last July, the television series “Ugly Betty” moved from Los Angeles, where it has been filmed for two years, to New York, on account of a recently tripled tax incentive. Given that the series, whose third season premieres tonight, is now being shot in the city where it is supposed to take place, you can't exactly call it a runaway production -- more like a "run-to production," perhaps. Still, it feels like a loss for the home team and an injury to local pride, not to say local pocketbooks.

Even before the current financial crisis, a federal budget deficit of nearly $500 billion was projected for next year. Now an additional $700 billion has been committed to bailing out Wall Street, not to mention as much as $200 billion for mortgage giants Fannie Mae and Freddie Mac. So what do our friends in Washington do? They cut taxes to the tune of about $110 billion for everyone from companies that make wooden arrows for kids to Caribbean rum distillers.