Health Care Tax Credit: Guidance now available
IRS Issues Guidance on the new Health Care Tax Credit:
This is a new credit for small businesses with less than 50 employees. Details are available at:
http://www.irs.gov/newsroom/article/0,,id=231928,00.html
This is very advantageous for any small business that pays for their employee’s health insurance.
Labels: Tax Credits, Taxation
A Brief Overview of the Tax Compromise
From AccountantsWorld
1. Tax rates on individuals: Rates were schedule to revert to the 2001 rates after December 31,2010. Under the proposal they will continue at the lower amounts for two more years. The current rates are 10, 15, 28, 33, and 35%.
2. Phaseout of exemptions and limitation on itemized deductions: Both of these were schedule to resume in 2011 but they would be extended under the proposal for two more years.
3. Capital gains rates will also remain unchanged for two years. People in the 10 and 15% bracket would still have a zero capital gains tax rate.
4. Child tax credit, EIC and dependent care credit were all scheduled to go to lower levels. Under the President’s plan they would stay at the current levels through December 31,2012.
5. The Alternative Minimum Tax patch will be done for two years. The patching of AMT has become an almost annual ritual. It has been estimated that over 20,000,000 would be subject to AMT if the patch (raising of exemption amounts) was not enacted. Under this plan at least next year will not need a patch.
6. American Opportunity Tax Credit: This was schedule to revert to the HOPE credit levels under the proposal the AOTC would be extended for two years.
7. Payroll Tax Cut: To replace the expiring Making Work Pay a 2% reduction in payroll taxes has been proposed. This should be much easier to administer and also will many times give a much larger credit. Under the old rule the credit was limited to $800 and subject to a phaseout. Under the new law the credit for two earners would max out $4,272 (106,800 * 2 for each wage earner).
8. Expanded bonus depreciation. Bonus depreciation is at 50% but if the compromise is approved 100% of purchases of qualifying new property will be deductible with no upper limit. Unlike most items in the plan this is only scheduled to last through 2011.
9. Changes to the federal estate tax: The estate tax expired in 2010 and was scheduled to return in 2011 with a $1,000,000 exemption and a 55% top rate. Under the proposal the exemption would raise to $5,000,000 and a maximum rate of 35%. This is scheduled to expire after December 31, 2012.
10. None of these items have gone to congress and there is some disagreement in factions of both political parties so of course it may not pass or may pass in an altered state.
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Labels: Taxation
IRS issues new Mileage rate for 2011...
IRS Announces 2011 Standard Mileage Rates
WASHINGTON — The Internal Revenue Service today issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
• 51 cents per mile for business miles driven
• 19 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations
Issue Number: IR-2010-119
Revenue Procedure 2010-51 contains additional details regarding the standard mileage rates.
Labels: Mileage Rates
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