Posts Tagged ‘2010’

December 17: 2010 Tax Relief Act

Sunday, December 19th, 2010

Note: Much of the fol­low­ing is extracted from the Sen­ate Finance Committee’s expla­na­tion of  Reid-McConnell Tax Relief, Unem­ploy­ment Insur­ance Reatho­riza­tion and Job Cre­ation Act, which incor­po­rated the amend­ments to HR4853 that Pres­i­dent Obama nego­ti­ated with the Sen­ate and passed back to the House.  There was some debate in the house about the Estate tax, but the estate tax amend­ment was not passed.  The bill sub­mit­ted by the Sen­ate to the house appar­ently passed the house unchanged.  If it turns out that changes were made, we will update the list below with a strike through…

It is almost the end of the year and con­gress acted on some pend­ing leg­is­la­tion last Fri­day. The tax brack­ets, many tax credits, items of deduc­tion and adjust­ments to income, were tem­porar­ily extended or passed or patched through 2011 or 2012.

Estate tax.  Con­gress passed $5 mil­lion exemp­tion with a 35% tax through 2012; for the estates of 2010 dece­dents there will be a choice between no estate tax & no step up in basis for assets in excess of the $1.3 Mil­lion exempted (2010 rules) OR the $5 Mil­lion exemp­tion & 35% tax arrange­ment (estate tax rules for 2011 and 2012). 

Other items in the exten­ders bill passed by the house late Fri­day night in the 2010 Tax Relief Act:

  • The Bush era tax rates: 10, 25, 28, 33, and 35 per­cent tax rates have been extended through 2012-all would have increase otherwise.
  • The per­sonal exemp­tion phase out as well as the item­ized deduc­tion lim­i­ta­tion have been repealed through 2012. 
  • The 0 and 15 per­cent cap­i­tal gains tax rates have been extended through 2012.
  • The cur­rent child tax credit has been extended through 2012. 
  • Mar­riage penalty relief for the 15% tax bracket, EITC & the stan­dard deduc­tion has been extended through 2012.
  • The expanded child tax credit has been extended through 2012.
  • The expanded adop­tion tax credit and adop­tion assis­tance pro­grams exclu­sion has been extended through 2012.
  • The employer credit for expenses asso­ci­ated with child care assis­tance has been extended through 2012.
  • The credit for the third child with respect to EITC has been extended through 2012.
  • The expanded Coverdale sav­ings accounts have been extended through 2012.
  • The expanded Stu­dent Loan inter­est deduc­tion has been extended through 2012. 
  • The expanded exclu­sion for employer pro­vided edu­ca­tional assis­tance has been extended through 2012.
  • The tem­po­rary exclu­sion from income of cer­tain schol­ar­ships has been extended through 2012. 
  • Arbi­trage rebate excep­tion for school con­struc­tion bonds has been extended through 2012. 
  • Tax exempt pri­vate activ­ity for qual­i­fied edu­ca­tion facil­i­ties has been extended through 2012. 
  • Extend the Amer­i­can Oppor­tu­nity Credit through 2012.
  • Extend tax relief for Alaska Set­tle­ment funds through 2012. 
  • Two year AMT patch: In 2010 exempts $47,450 ($72,450 MFJ) from AMT, and in 2011 $48,450 ($74,450 MFJ). It also allows non refund­able per­sonal cred­its to be used against AMT.
  • Bonus depre­ci­a­tion: For prop­erty place in ser­vice between Sep­tem­ber 8,2010 and Decem­ber 31st 2011 a spe­cial 100% bonus depre­ci­a­tion maybe allowed.  For prop­erty place in ser­vice in 2012 50% bonus depre­ci­a­tion may be allowed. 
  • The Small Busi­ness Jobs Act extended/expanded sec­tion 179 through 2011.  This Act extends sec­tion 179 at the 2007 lev­els at $125,000 with a $500,000 phase out thresh­old indexed for infla­tion for 2012.
  • Emer­gency unem­ploy­ment and extended ben­e­fits have been con­tin­ued for 1 year. 
  • Dur­ing 2011 employ­ees and self-employeds will have Social Secu­rity with­hold­ing reduced by 2%.
  • The fol­low­ing cred­its have been extended through 2011: Biodiesel & Renew­able Diesel, Refined Coal, Energy-Efficient Homes, Alter­na­tive Fuels, Spe­cial rules on the sale of elec­tronic trans­mis­sion prop­erty, spe­cial rule for mar­ginal wells, Sec­tion 1603 of the Amer­i­can Recov­ery & Rein­vest­ment act, Ethanol, Energy-Efficent appli­ances, Energy-Efficient Exist­ing homes, Alter­na­tive vehi­cle refu­el­ing property. 
  • The fol­low­ing indi­vid­ual adjust­ments and cred­its have been extended through 2011: $250 above the line deduc­tion for ele­men­tary & sec­ondary school teach­ers, the deduc­tion of state & local taxes in lieu of state & local income taxes, increased con­tri­bu­tion lmi­its for appre­ci­ated real prop­erty for con­ser­va­tion pur­poses, above the line deduc­tion for qual­i­fied tuition and related expenses, tax-free retire­ment plan dis­tri­b­u­tions (up to $100,000)  to char­ity, estate tax look-thorugh for RIC stock  held by non­res­i­dents, par­ity for mass tran­sit benefits.
  • Refund and tax credit dis­re­gard for means test­ing has been extended through 2012. 
  • The fol­low­ing busi­ness cred­its and deduc­tions have been extended through 2011: R&D, Indian Employ­ment, New Mar­kets, Rail­road track main­te­nance, mine res­cue team train­ing, employer credit for acti­vated mil­i­tary reservists, the spe­cial 15 year recov­ery period for cer­tain retail, restau­rant & leash­old improve­ments, 7-year straight line recov­ery period for motor­sport enter­tain­ment com­plexes, accel­er­ated depre­ci­a­tion of prop­erty on an Indian reser­va­tion, enhanced char­i­ta­ble deduc­tion for food inven­tory, enhanced char­i­ta­ble deduc­tion for con­tri­bu­tion of book inven­tory to pub­lic schools, enhanced char­i­ta­ble deduc­tion of com­puter equip­ment for edu­ca­tional pur­poses, elec­tion to expense advanced mine safety equip­ment, exten­sion of spe­cial rules for US films and TV show pro­duc­tions,  expens­ing envi­ro­men­tal reme­di­a­tion, DPAD in Puerto Rico, spe­cial rules for cer­tain pay­ments made to an tax-exempt entity from a con­trol­ing entity, spe­cial treat­ment of cer­tain div­i­dends of RICs, exten­sion of treat­ment of cer­tain RIC as Qual­i­fied Invest­ment Enti­ties under FIRPTA, the active financ­ing excep­tion, look-though treat­ment of related for­eign con­trolled cor­po­ra­tions, pro­vi­sion that allows S-Corporation share­hold­ers to take into account their pro-rata share of char­i­ta­ble con­tri­bu­tions even if the deduc­tion exceeds the shareholder’s basis in the cor­po­ra­tion, Empow­er­ment Zones, DC Enter­prise Zone, Amer­cian Samoa econ­mic devel­op­ment credit, Work Oppor­tu­nity Tax credit, exten­sion and increased autho­riza­tion for qual­i­fied zone acad­emy bonds, Pre­mi­ums for mort­gage insur­ance ded­cutible as inter­est that is qual­i­fied res­i­dence inter­est, extend the 100% exclu­sion of cer­tain small busi­ness stock acquired in 2011 and held for more than 5 years.
  • NY Lib­erty Zone bonds issue extended through 2011
  • Credit for reha­bil­i­tat­ing his­toric build­ings in the GO Zone extended through 2011
  • Credit for GO Zone low income hou­se­ing placed in ser­vice through 2011.
  • GO Zone bonds issue extended through 2011
  • 50% depre­ci­a­tion allowance for GO Zone busi­ness prop­erty placed in ser­vice through 2011

The pre­ced­ing list was what was in the bill the Sen­ate passed to the house on Decem­ber 15, 2010.  The bill sub­mit­ted by the Sen­ate to the house appar­ently passed the house unchanged. 

Expanded Infor­ma­tion Report­ing: Repeal of the expanded infor­ma­tion report­ing is not likely to happen-the bill intro­duced by Sen­a­tor Bac­cus of Mon­tana to do that very thing was soundly voted down.  The IRS has a year to work out the wrin­kles before this infor­ma­tion report­ing actu­ally begins, so there will be more guid­ance coming.  For more infor­ma­tion on this topic read here.   

The fol­low­ing items were NOT EXTENDED

  • The increase stan­dard deduc­tion for prop­erty taxes. 
  • The waiver of Required Min­i­mum Distributions
  • Mid­west­ern dis­as­ter relief
  • Hope & Life­time learn­ing tax cred­its — they have been replace by the Amer­i­can Oppor­tu­nity Credit

Small Busi­ness Jobs Act: There has been some activ­ity with respect to cer­tain busi­ness cred­its and deduc­tion ear­lier in the year with the Small Busi­ness Jobs Act; you can read about the impli­ca­tions of that act here.

The Busi­ness Mileage rate for 2011 has been announced: 51 cents per mile, med­ical and mov­ing mileage is still 19 cents per mile and char­i­ta­ble mileage is still 14 cents per mile.

Paid Tax Pre­parer Over­sight: Remem­ber start­ing in 2011 all paid tax pre­par­ers must have a Pre­parer Tax Iden­ti­fi­ca­tion Num­ber (PTIN).  All Tax Return Pre­par­ers are now sub­ject to the over­sight of the Trea­sury Depart­ment.  All indi­vid­u­als who pre­vi­ously had a PTIN issued have to renew their PTINs with the IRS before prepar­ing any tax returns in 2011.  Fur­ther­more tax pre­par­ers who file more than 100 tax returns per year will need to obtain an EFIN as they will be required to e-file all tax returns.

As always, small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client. 

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in. The con­tent of this blog gen­er­ally applies to busi­ness and indi­vid­ual tax­a­tion in the United States of Amer­ica.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant, human resource spe­cial­ist, cer­ti­fied finan­cial plan­ner or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice. Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to anyone else.

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Posted in Business Taxes, Individual Taxes | 5 Comments »

September 2010 Tax Update

Saturday, September 4th, 2010

Con­gress con­tin­ues to do noth­ing.  There is a lot of spec­u­la­tion about what they might do and when, but basi­cally things are pretty much where they have been for months. Some think that con­gress will act on extend­ing the Bush tax cuts, extend­ing pro­vi­sions that lapsed at the begin­ning of this year and AMT before the Novem­ber elec­tions and some think they will do some­thing in the lame duck ses­sion after the Novem­ber elec­tions. The rea­son for inac­tion is pol­i­tics — the Democ­rats want to make an issue of tax cuts to high income indi­vid­u­als and Repub­li­can oppo­si­tion to other mea­sures that help low income folks, the Repub­li­cans say the Democ­rats’ tax hikes hurt small business. 

In a sim­i­lar vein there is some spec­u­la­tion that con­gress will act to repeal the expanded 1099-MISC infor­ma­tion report­ing it made law with the health care leg­is­la­tion.  Once again, until that actu­ally hap­pens tax­pay­ers must deal with mat­ters as they are now, not as they hope they will be. 

The  Estate tax: short advice is to talk to a pro­fes­sional that spe­cial­izes in Estate taxes.  GOT that? This is not a DYI activ­ity.  The vast major­ity of peo­ple do not wind up fil­ing the Estate Tax Return, Form 706.  But for those that do, proper advice is essen­tial.  What is dif­fer­ent in 2010? Given that in 2010, so far, there is no estate tax, heirs will start with the decedent’s basis for assets (rather than the step up in basis of the assets at the time of death or alter­nate val­u­a­tion date). The execu­tor can then increase the value of up to $1.3 Mil­lion in assets to the date of death val­u­a­tion. Up to $3 mil­lion extra can be allo­cated to the sur­viv­ing spouse.  The basis allo­ca­tion can­not increase the asset’s basis over its value.  That means for very large estates, heirs will have to pay up, but the cap­i­tal gains tax is far less than the estate tax would have been AND the heirs con­trol when they pay the tax because it is not due until the heir sell the asset.

Expanded 1099-MISC Report­ing: Busi­nesses need to have their account­ing sys­tems in place start­ing 2011-they need to have the abil­ity to track the dif­fer­ence between pay­ment via Debit or Credit Card, verses pay­ment Cash, Check or Barter (to cor­po­ra­tions) so they can take advan­tage of the IRS guid­ance.  They will need  Form w-9 or equiv­a­lent from all busi­nesses with whom they exchange more than $600 per year for goods and/or ser­vices in 2011. Real­ize busi­nesses are sup­posed to do 28 % backup with­hold­ing from busi­nesses that refuse to sup­ply their TIN — busi­nesses should col­lect the W-9 as soon as they pay a busi­ness money in 2011, espe­cially if they know it will add up to more than $600 by year’s end.   

With respect to other tax breaks…

State­ment No 1. If your favorite tax break has not been re-enacted, do not plan for it to be.  Set aside some funds to pay the extra tax. 

State­ment No.2. Whether before or after the Novem­ber elec­tions, right now many believe:

  • the tax rate cuts for tax­pay­ers with incomes below $200,000 will be extended,
  • the 15% cap­i­tal gains rate will be extended,
  • there will be an exten­sion of Sec­tion 179,
  • exten­sion of Bonus Depreciation,
  •  exten­sion of busi­ness and indi­vid­ual energy tax credits,
  • exten­sion of the state and local prop­erty tax stan­dard deduction,
  • exten­sion of state and local sales tax in lieu of the state and local income tax deduction,
  • exten­sion of tax free dis­tri­b­u­tion from an IRA,
  • exten­sion of the research credit for businesses,
  • exten­sion of enhanced char­i­ta­ble con­tri­bu­tions for food inven­tory and cor­po­rate com­puter dona­tions for education.

All of these tax cuts are expected to be revived, but see State­ment No. 1.  The best advice is for tax­pay­ers must plan around things as they stand now, after­all no one pre­dicted that con­gress would actu­ally let the Estate Tax expire and yet… it did.

As always, small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.  Please note: Our offices will be closed until Octo­ber 1, 2010.  We may respond to emails and calls in the inter­rim, but no staff will be avail­able to meet with you in per­son until Octo­ber 1, 2010. 

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in. The con­tent of this blog gen­er­ally applies to busi­ness and indi­vid­ual tax­a­tion in the United States of Amer­ica.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant, human resource spe­cial­ist, cer­ti­fied finan­cial plan­ner or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice. Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to any­one else.

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Posted in Business Taxes, Individual Taxes, Other Information | 1 Comment »

Changes to Arizona’s Tax Credit For The Working Poor in 2010

Tuesday, February 2nd, 2010

Last year the AZ Tax Credit For The Work­ing Poor got bet­ter as the so called base period restric­tion was removed.

This year, the Ari­zona Depart­ment of Rev­enue (AZ DOR) is tasked with mak­ing sure all the char­i­ties on the list for this credit  meet the con­di­tion that 50% or more of every dol­lar donated goes directly toward assist­ing the work­ing poor, so they sent out a ques­tion­naire to every char­ity on the 2009 list.  Sev­eral responded, “Yeah, yeah, we know, we do not qual­ify.” Oth­ers have not responded at all.  The net result is the 2010 list of eli­gi­ble orga­ni­za­tions is much shorter that the one for 2009.

Before you donate to a char­ity expect­ing to receive this credit you may want to check to see if they are still on the list.

Just because the char­ity doesn’t appear on the list doesn’t mean you can’t make a char­i­ta­ble con­tri­bu­tion to them and take a deduc­tion, it merely means you will not be eli­gi­ble for this Tax Credit.

Also just because your favorite char­ity has not yet showed up on the list, doesn’t mean that they won’t; it means they have not com­pleted the ques­tion­naire and returned it to the AZ DOR. Until they do they will not be a char­ity eli­gi­ble for the tax credit in 2010.

In other news, this year the AZ DOR is NOT dis­trib­ut­ing 2009 Income Tax Forms at the local post offices nor  at  local libraries.  They will NOT mail them even if you call to order one.  The only ways to get the income tax forms is from an AZ DOR office or to down­load it from their web­site: http://www.azdor.gov/Forms/Individual.aspx.  If you fol­low the links to the AZ DOR web­site, please be advised that you’re nav­i­gat­ing away from ArtAndBusinessConsulting.com and you will be sub­ject to their policies-we do not know what they are nor do we have con­trol of them.

If you need help with these issues or any other, remem­ber, small busi­ness ser­vices and tax­a­tion are our busi­ness.  Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice.  Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to any­one else.

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Posted in General Individual, Individual Taxes | 1 Comment »

We’re Back

Sunday, January 10th, 2010

Sorry to have fallen off the Blog Planet for so long.  It was the hol­i­days and we at ABC LLC were liv­ing life instead of writ­ing busi­ness blogs.  We hope you had a good time with your friends and fam­ily as well.  Any­way, it is a Happy New Year with a whole raft of new things to think about in terms of tax­a­tion, busi­ness, employ­ees etc.

First off, the Stan­dard Mileage rate decreased in 2010.

  • Busi­ness mileage is now 50 cents per mile.
  • Relo­ca­tion and med­ical mileage are now 16.5 cents per mile.
  • Char­i­ta­ble mileage remains unchanged at 14 cents per mile.

As always the stan­dard mileage rate can only be used if the tax­payer leases/owns a pas­sen­ger auto, van, pickup truck or panel truck not used for hire, which was not depre­ci­ated under ACRS, MACRS or sec­tion 179 in ear­lier years.

Employee with­hold­ing has risen.  The Mak­ing Work Pay Tax Credit con­tin­ues, but in 2010 it is spread over the entire 12 months of the year unlike 2009. In addi­tion the IRS added two wage brack­ets to the 2010 tax tables:

  • Single/Head of House­hold:  0%, 10%, 15%, 25%, 27%, 30%, 28%, 33%, 35%
  • Mar­ried: 0%, 10%, 15%, 25%, 27% 25%, 28%, 33%, 35%

Wage brack­ets are not tax brack­ets, wage brack­ets are used to fig­ure fed­eral with­hold­ing tax. There are still only 6 tax brack­ets which dif­fer for Mar­ried, Sin­gle and Head of House­hold; they are slightly wider than 2009, but the tax per­cent­age for each bracket remains the same as 2009.

Even as you are prepar­ing to put 2009 behind you, you should know that Con­gress did not reau­tho­rize dozens of tax breaks for indi­vid­u­als and busi­nesses before the mem­bers went home for the home the hol­i­days; how­ever sev­eral mem­bers of con­gress have vowed to restore them and make them retroac­tive to Jan­u­ary 1, 2010-but as of today that has not hap­pened.  By allow­ing these tax breaks to lapse, Con­gress has essen­tially enacted tax increases.  Some of the 50 Tax Breaks That Expired:

  • Bonus 50% Depre­ci­a­tion for busi­ness equip­ment purchases
  • Increased limit on sec­tion 179 expens­ing of busi­ness equip­ment goes from $250K to $125K and the increased annual limit on pur­chase eli­gi­ble for sec­tion 179 goes from $800K to $500K
  • Above the line deduc­tion for qual­i­fied tuition and related expenses $4,000
  • Above the line deduc­tion for the qual­i­fied expenses of ele­men­tary and sec­ondary school teach­ers $250
  • 15-year straight-line recov­ery period for qual­i­fied lease­hold improve­ments, qual­i­fied restau­rant improve­ments, and cer­tain improve­ments to retail space.
  • Cor­po­rate char­i­ta­ble con­tri­bu­tions for com­puter tech­nol­ogy, food inven­tory and books
  • Con­tri­bu­tions of cap­i­tal gain real prop­erty for con­ser­va­tion purposes
  • Tax-free treat­ment of qual­i­fied char­i­ta­ble dis­tri­b­u­tions made from IRAs for those over age 70 ½
  • Waiver of 2009 min­i­mum required dis­tri­b­u­tion rules for IRAs and defined con­tri­bu­tion plans
  • Basis adjust­ment to stock when S-corporation makes char­i­ta­ble con­tri­bu­tions of property
  • Deduc­tion of state and local gen­eral sales taxes
  • Addi­tional stan­dard deduc­tion, up to $500 for indi­vid­u­als and $1,000 for cou­ples, for state and local prop­erty taxes
  • For 2010 Repeal of over­all lim­i­ta­tion of item­ized deduc­tions. In 2009, the lim­i­ta­tion was reduced to 1/3 of what it would oth­er­wise have been.
  • The Work oppor­tu­nity credit for hir­ing qual­i­fied vet­er­ans and youth
  • Research tax credit and alter­na­tive sim­pli­fied credit
  • New mar­kets tax credit
  • Empow­er­ment zone incentives
  • Renewal com­mu­nity tax incentives
  • Dis­trict of Colum­bia Invest­ment Incentives
  • Alter­na­tive fuel mix­ture tax credit
  • Net dis­as­ter loss des­ig­na­tion and $500 limit per casu­alty for per­sonal casu­alty losses attrib­uted to fed­er­ally declared nat­ural disasters
  • Expens­ing for qual­i­fied dis­as­ter expenses
  • Biodiesel and renew­able diesel incentives
  • Alter­na­tive motor vehi­cle credit for heavy hybrids
  • Increased exemp­tion lev­els for the indi­vid­ual alter­na­tive min­i­mum tax and per­sonal tax cred­its allowed against the AMT
  • Exclu­sion of unem­ploy­ment com­pen­sa­tion ben­e­fits from gross income
  • Reduced esti­mated tax pay­ments for small businesses
  • Sub­part F rules for multi­na­tion­als affects how U.S. share­hold­ers can be taxed on cer­tain income that a com­pany earns abroad.
  • Look-through rules for multi­na­tion­als pro­vi­sion exempts some of that income, includ­ing div­i­dends paid to share­hold­ers, from being taxed in the U.S.
  • 7-year straight line cost recov­ery period for motor­sports enter­tain­ment complexes
  • Railroad-track main­te­nance credit,
  • Spe­cial expens­ing rules for U.S. film and tele­vi­sion productions
  • tax laws that help Puerto Rican and U.S. Vir­gin Islands distillers
  • Expens­ing of brown­fields (sites con­t­a­m­i­nated by haz­ardous waste) envi­ron­men­tal reme­di­a­tion costs.  Also exclu­sion of gain on the sale or exchange of cer­tain brown­field sites from unre­lated busi­ness tax­able income.
  • Mine res­cue team train­ing credit and elec­tion to expense advanced mine safety equipment.
  • Employer wage credit for acti­vated mil­i­tary reservists.
  • Five-year depre­ci­a­tion for farm­ing busi­ness machin­ery and equipment.
  • Spe­cial rules for for­eign share­hold­ers of reg­u­lated invest­ment companies.
  • Spe­cial rule for per­cent­age deple­tion for mar­ginal wells.
  • Exten­sion of spe­cial tax treat­ment of cer­tain pay­ments (inter­est, rents, roy­al­ties and annu­ities) to con­trol­ling exempt organizations.
  • Indian employ­ment credit.
  • Accel­er­ated depre­ci­a­tion for busi­ness prop­erty on an Indian reservation
  • Amer­i­can Samoa eco­nomic devel­op­ment credit.
  • Spe­cial rule for sales of elec­tric trans­mis­sion property.

We attempted to find the com­plete list of the 50 Tax Breaks That Expired, but were unable to.  Sev­eral of the breaks listed above refer to more than one part of the tax code so they may encom­pass more than one tax break. Sources vary so it is pos­si­ble one or more of the items on this list have been addressed by Con­gress since the source was writ­ten (the old­est record used was Decem­ber 8th).  Although Con­gress is likely to reau­tho­rize many of these tax breaks before the end of 2010, they may take a while to do it-recall it took Con­gress until Octo­ber in 2008. The expired tax breaks incon­ve­nience tax­pay­ers who will have to decide whether to plan for their tax sit­u­a­tion as it exists now, or risk a tax bill or other unplanned expenses while they roll the dice in hopes that Con­gress will retroac­tively reau­tho­rize their favorite tax break provision.

This list does not include of sev­eral items set to expire at the end of 2010, which have their own tax impli­ca­tions.  Most notable among the breaks set to expire at the end of 2010 are the repeal of the estate tax in 2010, as well as reduced cap­i­tal gains and div­i­dends rates.  Of course you can’t plan to die this year, but you may want to look at your invest­ments with an eye toward pos­si­ble tax increases in 2011.

As always, small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice.  Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to any­one else.

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