Archives for Laws

Research and Development Credits Updates

On 12/19/2014, President Obama signed the H. R. 5771 Bill, known as the Tax Increase Prevention Act.  This means that a host of tax credits are being extended to another tax year. Among these is the Research and Development credit. Many small and middle sized businesses do not claim the credit because of the complications in calculating it: The research credit equals the sum of: (1) 20% of the excess (if any) of the qualified
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Expiring 2014 Tax Provisions

  List of 2014 Expiring Tax Provisions 55 tax breaks are expiring, here is a list of some of the most important ones. A tax credit for research and development, benefiting a wide range of industries, including manufacturers, pharmaceutical makers and high tech companies. The tax break saved companies an estimated $6.2 billion in 2013.  This is a 20% tax credit on R&D expenditures. An exemption that allows banks, insurance companies and other financial firms
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Obamacare New Taxes 1/1/14

Obamacare Taxes 3% Tax on Medical Device Manufacturers 2014 10% Tax on Indoor Tanning Services 2014 Blue Cross/Blue Shield Tax Hike Excise Tax on Charitable Hospitals which fail to comply with the requirements of ObamaCare Tax on Brand Name Drugs Tax on Health Insurers $500,000 Annual Executive Compensation Limit for Health Insurance Executives Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D Employer Mandate on business with over
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IRS debt – Ways to consolidate your back taxes

People who have dealt with the Internal Revenue Service (IRS) before know how much of a herculean task it is come out of their grip unscathed. This federal tax collection body is entrusted as the guardian of the nation’s tax code. However, if the ground realities are to be considered, then people are bound to face financial crisis at any moment that may force them stop making tax payments and spend those money on more
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Tax Planning 2012 and Beyond

Starting in 2010, tax planning has been exceedingly difficult.  The Bush tax cuts were extended till 1/1/2013 – 2011 & 2012 tax years.  After 2012, tax rules revert to pre Bush tax cut days. Here is a list of tax cuts expiring: Top marginal income tax rate will increase from 35% to 39.6%, a 4.6% increase.  This tax bracket hits taxpayers the following way:  Single, Married Joint, Head of Household brackets – Over $388,350;  Married
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Patient Protection and Affordable Care Act (PPACA)

Patiently waiting, the PPACA has now passed muster with the Supreme Court.  Only 2 provisions were changed. The provision on penalty for PPACA for the individual mandate (all individuals must have health insurance) is now called a “tax” under Congress’s power to levy taxes.  Also states that opt out of Medicaid provisions, may not be mandated to follow-thru on the mandated Medicaid rules.  In essence, if these states don’t want to burden of administering the
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R&D Tax Credit – Discovery test invalidated

Important R&D tax case back in June 9, 2009, 5th Circuit of Appeals in Texas Southern District ruled in US vs McFerrin.  The Mcferrins co-founded KMCO Inc a manufacturer of chemicals. The engaged an R&D tax credit firm to perform a study for them.  IRS challenged the credit and the district court ruled in the government’s favor that the taxpayer failed to engage in the controversial discovery of information test showing some threshold of innovation
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Small Business Jobs Act 2010

Highlights of Small Business Jobs Act 2010 HR 5297 signed on 9/27/2010 1) Bonus depreciation extended to 12/31/2010.   Bonus depreciation is 50% depreciation on new equipment acquired. No taxable income or equipment total restrictions 2) Section 179 expensing up to $250,000 thru 12/31/2011.  Was scheduled to revert back to $125,000. 3) Auto depreciation for new passenger cars now up to $11,060 for 2010. 4) S corp built in gain period for conversion of C corp to S
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