On October 3, 2008, President Bush signed into law a number of tax provisions which were included among the laws passed related to the bailout and stabilization of the financial markets. Rodman & Rodman, P.C. Certified Public Accountants and Business Strategists catering to small and medium sized companies throughout New England, outlines these tax provisions for taxpayers.
A number of relief provisions have been implemented to prevent middle income taxpayers from falling prey to AMT. These include:
· AMT exemption amount increases to $69,950 for joint filers and $46,200 for single filers.
· Allowing taxpayers to offset various nonrefundable personal credits against AMT, including, the dependent care credit, child tax credit, and Hope and Lifetime Learning credit as well as other credits;
· For taxpayers who exercise incentive stock options, recognizing phantom income for AMT, there has been an extension and expansion of the limited relief.
With regard to charitable provisions:
· The provision allowing taxpayers aged 70 ½ to donate up to $100,000 to public charities from IRA or Roth IRA accounts without recognizing such amounts as taxable income has been extended through 2009.
Other notable provisions:
· Favorable changes have been made to the Alternative Simplified Credit and the Research and Development Credit has been extended through 2009.
· Favorable Depreciation 15 year write-off rules for qualified leasehold, restaurant and retail improvements are extended through 2008.
There are many extensions, modifications and new rules for popular energy credits including:
· The 30 percent Investment Tax Credit for solar energy property is extended through 2016
· The Credit for Residential Solar Property is also extended through 2016 with increased credit caps
· There is now a “Plug In” vehicle tax credit ranging from $2,500 to $7,500 (although the credit is phased out after the 250,000th plug in vehicle has been sold)
· The Energy Efficient Residential credit is extended through 2009 with some additional incentives
· The law allowing taxpayers to deduct certain costs of energy efficient property for commercial buildings is extended through 2013
· The Contractor Construction Energy credit allowing contractors a credit for the construction of energy efficient homes is extended through 2009.
Various revenue raisers have been imposed to offset the above tax incentives such as:
· Brokers are mandated to report to the IRS on transactions involving publicly traded securities, extending the FUTA surtax of .2 percent through 2010 as well as other provisions targeted to specific taxpayers such as energy and oil companies.
“We strongly urge taxpayers to consult with a tax professional if they have any questions about the new tax provisions,” explained Steven P. Rodman, CPA, MST, president of Rodman & Rodman, P.C.
Rodman & Rodman, P.C.
Founded in 1961, Rodman & Rodman, P.C. provides accounting, tax and business services to small and medium-sized companies throughout New England. With a focus on strategic planning, Rodman & Rodman goes beyond traditional accounting services and takes a proactive approach when serving clients to increase, preserve and sustain clients’ financial net worth.
From business valuations, taxation, audits, fraud detection and prevention services and succession planning to a variety of accounting IT services including software selection, implementation and training, the team at Rodman & Rodman serves as comprehensive advisors to clients. For individual clients, the company offers personal advisory services such as planning for real estate transactions, obtaining financing, estate planning and retirement planning as well as planning for college education. Rodman & Rodman Certified Public Accountants are located at 3 Newton Executive Park in Newton, Mass. For more information, visit their website at www.rodmancpa.com or contact Jen Reading at (617) 965-5959.
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