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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Excess Liquidity

What is Excess Liquidity?  It’s a term that banks or other financial institutions utilize to talk about too much money or capital chasing too few deals.  It’s an interesting phenomenon. The last time we had this , was in 2006 and 2007 before the economy deflated.  There was a lot of investment money in 1) Hedge funds 2) Private equity 3) Commercial banks buying business assets.  Loan restrictions were relaxed and loans were given to people
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IRS notices – CP 2000

Recently I’ve been helping clients with CP 2000 notices. Many people get panicked when they get this notice. Many times the IRS assumes the worst when they send this notice. What is a CP 2000 notice, basically the IRS received a 1099 indicating that the taxpayer is missing income.  For example , the IRS received a 1099 from Bank of America indicating you were paid $1,000 to your CD.  Most people I meet, never really
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Congress extends Medicaid and education funding at expense of multinational corporations

Just read an excellent update on the new bill that passed on 8/10/2010 in the House, still subject to Senate vote.  Quick summary: Medicaid / Education funding for states passed Continual erosion of ability to get foreign tax credits for multinationals or even taxpayers with multiple foreign corps.  Foreign tax credits prevent the double taxation of US and foreign taxes.  For example if your US corp owns a UK corp, that US corp may have
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IRS on the auditing warpath

See this article on IRS increasing audits of small to medium sized businesses by 30%.  We are seeing this in my practice and in talks with other practioners.  My opinion on this is that the IRS can get easier dollars by targeting small businesses rather than large ones with less resources, even though per dollar-wise, it still makes sense for the IRS to go after the Fortune 1000s.  Of course this is bad news for
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Buy or Lease a Car

I’ve been getting many questions on to buy or lease a car/truck/SUV. Last year, the question was clear, if you used your car for business, it was better to buy, you got an additional 11K in depreciation (2009).  For SUV or trucks over 6,000 lbs , if used 50 percent for business, you can take an additional $25,000 in depeciation + bonus depreciation (take another 50% off the cost basis for depreciation) in 2009.  SO BUY was
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Celebrities with tax problems

Many average Americans have tax problems – tax liens, judgments, filing issues.  Well, the well heeled and famous also do too and many times they get the star treatment. Nicolas Cage – owes $6.3MM in back  taxes from 2002-2004 and 2007.  He is suing his business manager for taking extravagant tax deductions and not being told about it. Wesley Snipes – owes $17MM and has been found guilty of defrauding the government.  His tax advisors
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IRS New Changes 2010

After a very interesting discussion with the IRS liason recently here in Pasadena.  There are some interesting changes in store for tax professionals and the unsuspecting public: 1) Tax professionals and their unlicensed staff must either re-register (get a PTIN) or register with the IRS. Registration entails getting education (CE).  IRS wants to license all tax professionals.  No word yet on foreign tax professionals.  Wonder how Ernst & Young will cope since many of its
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Tax hikes or yikes – Bush tax cuts expire

Bush tax cuts are due to expire end of 2010: Here are the key provisions: 1) Top marginal income tax rate goes from 35% to 39.6% 2) Qualified dividend tax rate goes from 15% to your income tax bracket, which can be has high as 39.6% 3) Long term capital gain tax rate goes from 15 to 20% for most taxpayers. 4) Section 179 depreciation goes from $250,000 to $25,000 5) Estate tax exemption goes
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Alternative vehicle tax credits

Please check out the IRS website for the alternative vehicle credits.  There are credtis for hybrids, electric, clean diesel, fuel cell vehicles.  Keep in mind depends on quotas.  Talk with your tax advisor to see if the quota has been met for that vehicle.  Credits seem to be best on electric vehicles. Credits range from $500 to $4,000. http://www.irs.gov/businesses/corporations/article/0,,id=202341,00.html
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