Financial Planning Opportunities For Individuals and Selected Corporate Tax Matters 2010 and 2011 Considerations - Part 5

Table of Contents 

Corporate Tax Provisions

2010 Small Business Jobs Act 

  • 50% Bonus Depreciation
    • Effective for the full year in 2010, expires December 31. Applies to all asset purchases
    • Estimated tax may be overstated in 2010 since extension of bonus depreciation was not known until September 2010; review 4th quarter estimates
  • Small Business Credits
    • 2010 allows general business credits from eligible small businesses to offset Alternative Minimum tax
    • Eligible small businesses include
      • non-publicly traded corporations, partnerships and sole proprietorships whose gross receipts are under 5 million for last 3 years
  • Section 179 Expense
    • 2010 deduction increased from $250,000 - $500,000
    • Phase–out increased from $800,000 to $2 million
    • Qualified Real Property allowed for Section 179 expense
  • Review 4th quarter 2010 Projections
    • Opportunity to reduce tax considering purchases and Section 179 rules
  • Qualified Small Business Stock (QSBS)
    • Can now exclude 100% of gain on QSBS acquired between 9/27/2010 and 1/01/2011, and where held for 5 years
    • Applies to both regular and AMT tax
    • Applies to non-corporate taxpayers

On The Horizon 

  • The President’s bipartisan deficit commission released a draft proposal on November 10th
    • The proposal would reduce spending in fiscal 2012 by $1.46 trillion in discretionary spending and $733 billion in mandatory spending from 2012-20
    • The proposal would raise $751 billion through tax changes and bring in $210 billion in other revenue (i.e., enacting a chained consumer price index and increasing the gas tax).
    • The result would be a reduction in the deficit of $3.83 trillion by 2020
  • The proposal included three tax reform items:
    • “Zero Plan”
    • “Wyden-Gregg Style Reform”
    • “Tax Reform Trigger”

The material contained in this presentation is for general information and should not be acted upon without prior professional consultation. 

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