Accounting News and Notes

Both of the New Stimulus Bills Passed by Congress Bode Well for Companies

Using Tax Credits for You and Your Business

The Stimulus Bill passed late last year and the recent Economic Stimulus Plan contains several Tax Credits and Incentives for all businesses. With this down economy it’s now the ideal time to help your company’s profit improve by accessing the many benefits including:

• Small Business Expensing: A write-off of up to $250,000 of capital equipment is available.
• Expanded NOL Carry Back: It is now 5 years for businesses with less than $15 million in average gross receipts.
• AMT Patch: The exemption is increased from $46,200 to $46,700 for single filers and from $69,950 to $70,950 for joint filers and surviving spouses.
• S Corporation Reduction: If a business converts from a C Corporation to an S Corporation in 2009 or 2010, the S Corporation must hold its assets for only seven years, down from ten years, in order to avoid a tax on any built-in gains that existed at the time of conversion.
• Delayed Recognition of CODI: The Certain Cancellation of Debt Income will be allowed over 10 years (Check with your CPA on details).
• Estimated Tax Payment Relief: Individuals operating small businesses may be permitted to make lower quarterly estimated tax payments to the IRS in 2009.
• New Employee Tax Credit: The Work Opportunity Tax Credit is expanded to include unemployed veterans and disconnected youth. This now makes a total of eleven different groups of new hires that are eligible for this credit. This credit ranges from $2400 to $8500 per qualified new hire.
• Research & Development Tax Credit: Eligible expenses have increased from 10% to 14%. Most Printers, since they are classified as manufacturers, qualify for this credit, which is both a State and Federal credit.
• Federal Location Tax Credits: Businesses that are located in certain Federal location areas and have employees that live in that area can be eligible to receive tax credits from $1500 to $3000 per employee per year. The Bill extended this credit through 2011.

Each State offers Tax Credits, Grants, and other Incentives for qualified activities by business, while the Federal government offers over 25 different incentives. These programs, enacted into law, can help sustain your business and increase your profit.

Written By Terry McMillian of McMillian & Associates, Inc. LaGrange, Georgia. Contact Rick Linden at 678-468-1955

Related posts:

1. American Recovery and Reinvestment Act of 2009 (ARRA)
2. Economic Stimulus Act of 2008…Jumpstarting the U.S. Economy
3. Atlanta CPA on Hybrid Vehicles Credit…Getting Tax Credits While Saving Gas
4. The Economic Stimulus Plan and Your Business
5. Atlanta CPA Teaches Utilizing Tax Information To Understand Changes in Your Tax Situation

This entry was posted on Wednesday, May 13th, 2009 at 11:41 am and is filed under Atlanta Corporate Income Tax & S Corporation Return, Personal Income Taxes.
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