How the New Tax Law Can Help Your Business - Two Tax Breaks for Businesses

Congress recently passed the Economic Stimulus Act of 2008. It's designed to inject $152 billion into the U.S economy. What does this mean to you?

If you own a business, your business can take advantage of two tax breaks: Increased Section 179 Amounts and Bonus Depreciation.

You could be one of the 130 million taxpayers who will receive a rebate check this year. For more on this tax relief topic, please see my recent article: "Is The IRS Sending You a Rebate Check? Find Out If You Are Eligible."

If you own real estate or invest in real estate, your may find some relief with your "jumbo" loans.

INCREASED SECTION 179 AMOUNTS:

Before the new law, a business could expense up to $128,000 of the cost of qualifying property in 2008. Under the new law, a business can expense up to $250,000 of the cost of qualifying property. This is a huge increase!

Even the phase-out limits are increased. Before the new law, if the cost of qualified property placed in service during the year was more than $510,000, the amount a business could expense was reduced (dollar for dollar) by the amount over $510,000. Under the new law, the dollar for dollar reduction still applies but the old $510,000 ceiling jumps to $800,000.

What property qualifies for the Section 179 Deduction?
The new law makes no changes to the general rules for the types of property that are eligible for Section 179 expensing. Generally, the property must be depreciable tangible personal property (so real property, such as land and buildings, does not qualify) that is actively used in the taxpayer's business. The property must be used more than 50 percent for business and must be newly purchased property.

BONUS DEPRECIATION:

The other incentive is bonus depreciation. The new law provides qualifying taxpayers 50 percent first-year bonus depreciation of the adjusted basis of qualifying property. Make sure you make the election on your tax return - it's required in order to claim the bonus depreciation.

What property qualifies for bonus depreciation?

To be eligible to claim bonus depreciation, property must be one of the following types of property:

- Eligible for the modified accelerated cost recovery system (MACRS) with a depreciation period of 20 years or less (this includes most equipment, computers and furniture)

- Water utility property

- Computer software (off-the-shelf)

- Qualified leasehold property

The property generally must be purchased and placed in service during 2008. Original use of the property must begin with the taxpayer and must occur after December 31, 2007 and before January 1, 2009.

How is the luxury auto depreciation impacted?

Congress also increased the limitations on "luxury" auto depreciation. Ordinarily, the first-year limit on depreciation for passenger automobiles cannot exceed $3,060. However, this limit was increased when bonus depreciation was previously available to $4,600. The new law raises the cap once again, setting it at $11,060 for passenger autos and $11,260 for trucks and vans.

CAUTION! Be sure your business use of qualifying property stays above 50%. If it falls below 50% you may have to recapture some of the benefit previously claimed under Section 179 or the bonus depreciation.

WHAT DO THESE TAX BREAKS MEAN FOR YOUR BUSINESS?

These are very generous changes! These changes provide American businesses with an estimate $44 billion in additional deductions in 2008.

You will definitely want to plan your business purchases now. If you are planning on making equipment purchases in the next few years, now is the time to look out how moving those purchases to 2008 can cut your tax bill.

Tom Wheelwright is not only the founder and CEO of Provision, but he is the creative force behind Provision Wealth Strategists. In addition to his management responsibilities, Tom likes to coach clients on wealth, business, and tax strategies. Along with his frequent seminars on such strategies, Tom is an adjunct professor in the Masters of Tax program at Arizona State University. For more information, please visit http://www.provisionwealth.com

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Ranking Member Camp Floor Remarks Against the Death Tax

Madame Speaker, death should not be a taxable event. Death should not force the sale of family farms or the dissolution of small businesses. The fear of death should not be a reason for Americans to hire a battery of accountants and lawyers to find legal ways to reduce the bite of the estate tax. After a long wait, we are about to realize that goal. Set in motion by a law passed by the Republican Congress earlier this decade, there will be no death tax in 2010 thats just 29 days away. The bill before us, however, would resurrect the death tax next month and apply a 45% tax rate to estates above a $3.5 million exemption amount. The Majority claims to be offering certainty to taxpayers. And I suppose in a way they are. They are certainly repealing the hope of ever eliminating the death tax. They are replacing that with the certainty of a federal tax rate that, at 45 percent, must be considered confiscatory. No American should have the federal government take nearly half of their worth. They are providing the certainty of an exemption that is not indexed for inflation, meaning that, over time, it is certain that more and more family farms and small businesses will be subject to this punishing tax. Madame Speaker, one other thing that is certain about this bill is that it is unlikely to be approved before the end of the year. As we are all aware, the Senate is fully engaged in a health care debate and is unlikely to break from it to consider this bill this month, particularly ...



http://www.youtube.com/watch?v=-JbSiJVjbpM&hl=en

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The Benefits of Filing a 1040 Tax Return

For those that have filed a 1040EZ tax return form in the past, you might benefit from filing a 1040 tax return or a 1040A tax return if you had one of a few events happen in 2009, due to tax law changes. You can claim a number of credits that a 1040EZ form doesn't allow and you may be entitled to a larger refund or receive a refund where you might not ordinarily be entitled to one.

If you are taking college courses, or have a child in college under the Hope education credit, there has been an increased credit for 2009. Under the American opportunity credit, part of the previous Hope education credit is refundable to most taxpayers. The credit has increased to $2,500 for most taxpayers and the name has been changed to the American opportunity credit, so you should be aware of this change to avoid confusion.

If you have purchased a new car after February 16th of 2009, you may deduct state and local sales taxes on the purchase. Even those that live in states that don't have sales tax might be able to deduct other fees or taxes by filing a Form 1040A or itemizing on a 1040 tax return.

The most advantageous credit for filing a 1040 tax return form in 2009 is the first-time home buyer credit. Not only has the credit increased to $8,000, or $4,000 if married and filing separately, for those that bought a home after 2008 and before May 1, of 2010, but it is an actual credit that is refunded and not an incentive that needs to be repaid like the previous first-time home buyer programs.

There are energy credits that you can take advantage of on a 1040 tax return form, including credit for non-business energy property and residential energy efficient property credits. If you bought energy saving items like heating systems and appliances or added energy efficient materials, such as insulation or thermal windows, you can take advantage of the tax credits. Electric vehicle credits are available for those that bought an electric drive motor vehicle or converted a vehicle into an electric vehicle for energy efficiency.

While these are the largest tax credits that are available, it is likely that those who purchased a home in 2008 and are paying mortgage interest might have paid enough interest to be able to itemize on a Schedule A. You would benefit by filing a 1040 tax return and Schedule A itemizing form in 2009 if your deductions equal more than the standard deductions of $5,700 for single people or $11,400 for married couples.

There are some cases where you must file a 1040A or 1040 tax return to get credits for the standard deduction real estate taxes or credits for excess social security or retirement savings contributions. If you can claim the additional standard deduction for net disaster losses, you will need to file a 1040 tax return. There are other cases where you may have to file a 1040 tax return form that don't necessarily offer any benefit, such as owing special taxes on tips or self-employment income of more than $400, but your CPA can advise you of the proper forms for your situation.

For more information on accounting and tax services, please visit Flowers Rieger & Associates.

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American Tax Relief Programs Help Free Consultancy - Go For It

The tax net spares nobody and if you are not careful you might just be covered with a mountain of tax debts and the IRS will be knocking on your door. Here is where American tax relief comes into play as it might be able to take care of all your problems for you. However there are still some people who are averse to taking the help of American tax relief. We hope the pointers given below can help assail any doubts that you might have in this regard.

Only the Best of Legal Means

A few people think that the prospect of using American tax relief means using underhand means of solving their tax debt problems. Nothing can be farther from the truth as only legal means are applied to get rid of your debt. There should be no doubt in your mind regarding the same as the service providers are well versed with all the legalities that concern tax relief and will configure a plan of action that is cognizant of these legalities. Moreover, no American tax relief is brought about without the express consent of the IRS.

Quick and Easy

A bunch of people are of the opinion that going through the whole process of American tax relief takes up a whole lot of time and the debts, in the mean time, just keep piling up. Well, this is another bit of untruth as the process of getting tax relief is quick and accomplished without wasting any time and effort. Also, though you might find your debt a bit complicated the American tax relief service providers will untangle their complexities and streamline an easy repayment plan for you. The whole process is easy to understand.

Hassle Free

This is one of the main doubts that people have. Is American tax relief hassle free? The resounding answer herein is that it is. All you need to do is get in touch with the American tax relief service provider that you have chosen for your purpose and leave the problems at their door. Do what they say, and if you follow their instructions to the T, it won't be long before your tax debt problems are taken care of.

Expert Help

If the above reasons have not allayed your doubts or fears of taking help from American tax relief service providers then maybe this reason will suffice. Most of us can make neither head nor tail of taxation and the debts that pile up as a result of non payment of taxes for some reason or another. You need the help of experts to sort out your problems and more importantly the inside and outside of the debts that you have piled on.

This is why you must make your way to a service provider who has proven expertise in the business of providing tax relief solution.

As can be seen there should be no doubts, whatsoever, associated with the choice of going for the various American tax relief options that are on offer, to get rid of your tax debt problems.

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