Small Business Taxes & Management
Highlights of Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
Small Business Taxes & ManagementTM--Copyright 2010, A/N Group, Inc.
The text of the latest tax relief bill has just been released. This could be pretty close to a final version with respect to income tax provisions. Keep in mind nothing is final until it's actually signed. We've presented the tax highlights. Most of the provisions are extensions of existing law. Some have minor changes. Most of the provision are temporary and in effect for two years (e.g., the 2003 rates are in effect through the end of 2012).
- Extension of 2001 and 2003 tax relief including rates, capital gain and dividend rules.
- Extension of increased alternative minimum tax exemption amount ($72,450 for married; $47,450 for single individuals for 2010) and extension of AMT nonrefundable personal credits.
- Extension of 2009 tax relief provisions including the American Opportunity Tax Credit, higher child tax credit, and enhanced Earned Income Tax Credit.
- Reinstatement of estate tax with step-up basis, 35% maximum rate and $5 million exemption and special election for decedents dying in 2009.
- Extension of bonus depreciation and new 100% bonus depreciation for qualified property placed in service after September 9, 2010 and before January 1, 2011.
- Extension of higher dollar limits on expensing under Section 179.
- Extension of extended unemployment insurance benefits.
- Temporary (for 2011 only) payroll tax cut of 2 percentage points for employees and self-employed individuals (equal to $200 on $10,000 of compensation).
- Incentives for biodiesel and renewable diesel.
- New energy efficient home credit (homes acquired after December 31, 2009).
- Suspension of limitation on percentage depletion for oil and gas from marginal wells.
- Energy efficient appliance credit.
- Credit for nonbusiness energy property (includes a number of changes).
- Deduction for certain expenses of elementary and secondary school teachers.
- Deduction for state and local sales taxes.
- Contribution of capital gain real property made for conservation purposes.
- Above-the-line deduction for qualified tuition and related expenses.
- Tax-free distributions from individual retirement plans for charitable purposes.
- Employer-provided mass transit and parking benefits.
- Research credit extended through 2011.
- New markets tax credit extended.
- Employer wage credit for employees who are active duty members of the uniformed services.
- 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements.
- 7-year recovery period for motorsports entertainment complexes.
- Enhanced charitable deduction for contributions of food inventory.
- Enhanced charitable deduction for contributions of book inventories to public schools.
- Enhanced charitable deduction for corporate contributions of computer inventory for educational purposes.
- Special expensing rules for certain film and television productions.
- Expensing of environmental remediation costs.
- Basis adjustment to stock of S corporations making charitable contributions of property.
- Empowerment zone tax incentives.
- Tax incentives for investment in the District of Columbia.
- Work opportunity credit.
- Qualified zone academy bonds.
- Mortgage insurance premiums.
- Temporary exclusion of 100 percent of gain on certain small business stock.
- Increase in rehabilitation credit in GO zones.
- Low-income housing credit rules for buildings in GO zones.
- Bonus depreciation deduction applicable to the GO zone.
No mention is made of the additional standard deduction for state and local real property taxes.
Copyright 2010 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536
--Last Update 12/10/10