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Philadelphia, PA
Hi. Welcome to my blog. I have been in the tax arena for more than 30 years (what an awful thought), dealing primarily with the taxation of corporations and partnerships. I have recently moved to BBD, LLP in Philadelphia, where I am a director of tax services. If you were wondering, a combination of circumstances in my personal life and my specialization led to the name. It was created by my late wife, Suzann.

A Modicum of Tax Relief for Small Businesses

Tuesday, September 28, 2010

On September 27, 2010, the President signed the Small Business Jobs Tax Act of 2010 into law. Although the title references small businesses, there are many provisions that also impact large businesses and individuals.

Some of the more important changes brought about by the Act are:

  • An increase in the amount of fixed assets that can be expensed, to $500,000 for the 2010 and 2011 tax years. A business will be able to purchase up to $2 million of assets annually without reducing the amount that can be expensed.  For the first time, certain leasehold improvements will be eligible to be expensed, and computer software is now qualified property that can be expensed for all tax years from 2002 through 2011.
  • Bonus first-year depreciation (50 percent) has been extended through the 2010 tax year.  The first-year depreciation on autos has also increased from $3,060 to $11,060. 
  • The sale of qualified small business stock would not be taxed if it was acquired after the date of the enactment and held for at least 5 years.
  • An eligible small business (privately held, with average annual gross receipts of no more that $50 million) can carry back any general business credits 5 years.  For the first time, beginning after 2009, these credits will be available to offset the alternative minimum tax.
  • The period for which an S corporation with built-in gains would be subject to a corporate income tax has been reduced to 5 years if the S election was made by the 2006 tax year.
  • After 2010, rental activities would be considered a trade or business for purposes of requiring 1099 reporting for payments in excess of $600 to service providers.  Exceptions are available to those who temporarily rent their principal residence, if the income is less than an IRS determined minimal amount, and for those who would experience a hardship in reporting.
There are also provisions in the Act with regard individual retirement arrangements, sourcing of income earned by foreign persons and other less global issues.

If you have any questions, please contact me at bbdcpa.com.

3 comments:

Unknown October 27, 2010 at 11:47 AM  

The whole process of becoming e-file provider takes 45 days in total soo better one has to initiate the process straightaway. From 2012 it will become compulsory for most of the tax preparer which is 11 tax return or more but this is year any preparer who is preparing more than 100 will have to get E-services account.


This move to press for 100% e-filing where as now it is 70% e-filing by 2012 it will be 100% e-filing only .

Congress recently approved a federal e-file mandate for tax return preparers, based on recommendations from the IRS, the Treasury Inspector General for Tax Administration and the Electronic Tax Administration Advisory Council.
The requirement will be phased in over two years. As a result of the new rules, preparers will be required to start using IRS e-file beginning:

More details...

http://www.outsource2india.biz/2010/10/tax-return-preparers-required-to-use.html

Unfiled Tax Returns July 1, 2011 at 10:24 AM  

Gotta love the 1099 one...seems everyone will get a 1099 in the coming years.

estate taxes nj February 7, 2012 at 6:14 AM  

You're right, some of these also benefit large businesses. Thanks for keeping everyone informed.

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