Monday, January 12, 2009

Tax Change is Coming

Though Congress tried to extend some tax breaks for
businesses, it could not put the necessary legislation
together before adjourning for Thanksgiving. Congress
was able to pass a law authorizing seven more weeks of
unemployment benefits for out-of-work individuals (13
more weeks of benefits for individuals in states where
the unemployment rate is above 6%).

Tax Change is Coming  

A look at the provisions in the tax relief measure that
failed to pass will give you an idea of changes that are
very likely to occur, if not in a second lame-duck
session on December 8, then in 2009 when President-elect
Obama takes office. Here are the major provisions in the
proposed bill -

* Extension through 2009 of 50% bonus depreciation for
  the purchase of business equipment.

* Extension through 2009 of up to $250,000 first-year
  expensing for the purchase of business equipment.

* Easing funding requirements for pension plans to help
  cash-strapped businesses.

* Temporary suspension of required minimum distributions
  from retirement plans for those 70½ and older.

Congress is also set to create a stimulus package in
January comprised of tax cuts and some $500 billion in
federal spending on infrastructure over the next two

Stay tuned for what is likely to be a year with multiple
changes to the tax code. Make it a priority to contact
us for tax guidance before you make important financial
decisions this year.