The Stimulus Bill (TARP) passed late last year and the recent Economic Stimulus Plan contain 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:
- Bonus Depreciation: A 50% immediate depreciation is available for this year for new equipment.
- 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.
- Government Withholding One-Year Delay: The law requiring a 3% withholding from contracts and other payments is delayed to 12-31-11.
- 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. Now is the time to act!!
Terry McMillian, President
McMillian & Associates, Inc.