David Kirkpatrick

September 9, 2010

Full expensing of capital equipment in 2011

Now this is a tax break businesses of all sizes can get behind.

From the link:

White House Press Secretary Robert Gibbs said the president will announce a plan to offer businesses the chance to deduct 100 percent of the cost of qualifying capital equipment purchases made in 2011, double the amount allowed in the Emergency Economic Stabilization Act of 2008 (Pub. L. No. 110-343) and proposed for the small business bill (H.R. 5297) that is currently stalled in the Senate.

“We’re saying that for 2011, we believe that 50 [percent] should go to 100 [percent]. It builds off of an effort to get capital off the sidelines and into the economy,” Gibbs told reporters.

From the same link, here’s another excellent pro-business proposal:

The president also is pushing to make the research and development tax credit a permanent feature of the tax code, rather than continue to ask Congress to pass it as a temporary extension every year.

Making the R&D credit permanent and expanding it would cost about $100 billion over 10 years—a key reason Congress has not already done so—but Obama has argued that the change will benefit the economy by reducing business uncertainty about the credit’s future.

Update — here’s more on the R&D tax credit from Robert Atkinson, president of the Information Technology & Innovation Foundation:

It is welcome news that President Obama will ask Congress to expand and make the research and development (R&D) tax credit permanent. This will better enable the U.S. compete globally and make it clear that the United States has finally gotten off the sidelines in the fight for global economic competitiveness.

While expanding the credit from 14 to 17, as has been reported, makes sense. ITIF thinks an even more generous credit makes even better sense. ITIF estimates that expanding the credit from 14 percent to 20 per¬cent would create 162,000 jobs in the short to moderate run and an additional, but unspecified, number of jobs in the longer run – many of them high-skill, high wage jobs.

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February 16, 2010

New deductions and credits for 2009 tax year

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 1:27 pm

Here’s a handy list of ten new deductions and credits for this year’s taxes from Thomson Reuters.

From the link, numbers four and five — one for the employed and one for the unemployed:

4. Making work pay credit. Income tax withholding was reduced during 2009 to reflect the new making work pay credit, which slashes tax liabilities by up to $400 ($800 on a joint return). “Employers had to shoulder all the work of the withholding adjustment, but employees now need to claim the credit on their tax returns in order to hold on to that extra take-home pay,” Scharin explains. Tricky aspects of this credit arise from the eligibility rules; some folks whose withholding was reduced are not actually eligible for the credit. Ineligibility could arise because the credit phases out in the MAGI range of $75,000 to $95,000 ($150,000 to $190,000 for joint returns).

5. Unemployment compensation. Up to $2,400 of unemployment compensation benefits are completely tax-free in 2009. “These benefits are not included in your adjusted gross income, and that could help you to qualify for other tax benefits that have AGI restrictions,” Scharin points out.

January 26, 2010

Small business tax credit still in play

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 2:09 pm

It may have died in Congress, but a tax credit for small businesses creating jobs is a good idea. There are pros and cons, but overall Main Street needs this. Companies need a little more financial flexibility, especially if they legitimately need to add employees, and people out there just need more jobs.

From the link:

President Barack Obama’s push to create jobs includes a new tax credit for small businesses that add employees, an idea that fell flat in Congress last year and continues to have skeptics this year.

The idea has appeal as the nation struggles with an unemployment rate topping 10 percent. But House Democrats left out Obama’s proposal when they passed a jobs bill in December because they didn’t know how to target the credit effectively. The Obama administration still hasn’t provided details on how the tax credit would work, and some tax experts question whether it would.

January 8, 2010

If you do your own taxes …

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 7:08 pm

… remember a whole slew of tax provisions — credits, deductions and others — expired at the end of 2009.

From the link:

The ringing in of the new year at midnight on Dec. 31 also signaled the expiration of several tax provisions. The biggest was the estate and generation-skipping tax regime, which is repealed for 2010. Various bills have been introduced that would revive the estate tax in its 2009 form, but as of Jan. 1 no extension has been enacted, and the estate and generation-skipping taxes, at least temporarily,  no longer exist.

November 16, 2009

Business tax credit for job creation

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 4:56 pm

A good idea that ought to become a law:

A Democratic US senator on Friday unveiled details of a plan to create a tax credit for businesses that create jobs, as the White House has called a December summit to tackle sky-high unemployment

Senator Russ Feingold’s proposal would establish a tax credit over the next two years for businesses that hire new employees, expand work hours for current employees, or raise worker pay, his office said.

“While there’s no easy way to solve the unemployment problem, the jobs tax credit would be a targeted and responsible tool to help businesses hire workers and bring down unemployment,” according to Feingold.

The credit would amount to 15 percent of eligible payroll for 2010 and 10 percent in 2011 — and would exclude pay increases for very highly salaried workers, as well as the wages of firm owners or family members.

October 14, 2009

Is the homebuyer tax credit about to get massive expansion?

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 3:41 pm

Expansion to the tune of almost doubling the credit to $15,000 and allowing people other than first-time home buyers into the program. Now that’s some Main Street stimulus, but like “Cash for Clunkers” it’s geared to help one group of industries. Home building and finance in the latest case, automotive in the first case.

From the link:

Congress is considering proposals to greatly expand a soon-to-expire $8,000 tax credit for first-time homebuyers — potentially applying it to all but the wealthiest homebuyers.

Supporters say doing so would further boost home sales, stabilize housing prices and generate jobs. Opponents say extending and expanding the credit would be a waste of money and only temporarily stave off further price declines.

The credit now can be claimed by anyone buying a home who has not owned one for three years and who closes the deal by Nov. 30.

Beyond extending that deadline, some lawmakers want to make the credit available to all homebuyers who meet income eligibility requirements. And some want to increase the amount of the credit from $8,000 to $15,000.

Currently the first-time home buyer credit is available in full to those buying their primary residence who make $75,000 or less ($150,000 for joint filers). A partial credit is available to those making between $75,000 and $95,000 ($150,000 to $170,000 for joint filers).

October 6, 2009

Extending new homebuyers tax credit and COBRA benefits?

Maybe so.

From the link:

The White House is weighing whether to support extending the expiring new homebuyer tax credit and COBRA insurance benefits as part of its review of ways to help the U.S. economy. Gibbs, at a White House press briefing on October 5, took pains not to label these measures as part of a second stimulus package, although he noted that the president’s key economic advisors continue to look at additional options to spur job growth.

Obama, in his weekly address on October 3, said he is working closely with his economic team “to explore additional options to promote job creation.” He repeated his promise to take whatever measures are possible to help job seekers find employment, to open capital and credit markets to businesses and to keep homeowners from losing their homes.

Gibbs said that the White House is working with Congress over legislation to extend unemployment insurance. The House passed the Unemployment Compensation Extension Bill of 2009 (HR 3548) in September and sent it to the Senate on September 22 (TAXDAY, 2009/09/24, C.3). Gibbs said he believes the Senate should be able to act on the bill without further delay, even while health care reform deliberations are in the spotlight. “I think the Senate can do both, and a lot more,” Gibbs stated.

January 29, 2009

Stimulus package throws first-time home buyers a bone

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 5:41 pm

A pretty good bone at that.

From the link:

If you’re thinking of buying a home, there could be a big bonus for you in the economic stimulus bill that’s now before Congress.

Among its many provisions is a $7,500 tax credit for first time home buyers. The House passed the $819 billion stimulus plan, including this tax credit, in a vote late Wednesday. The Senate may vote on its version of the bill some time next week.

Technically, the stimulus bill is actually changing the terms of the $7,500 tax credit that was issued as a part of the Housing Recovery Act, which Congress passed last summer. That legislation required that the tax credit be repaid over 15 years, making it more of a no-interest loan. Not surprisingly, the measure had little impact on the market. The stimulus bill now under consideration would make that tax credit a true credit that doesn’t need to be repaid.