New Law Allows Faster Write-Off of Business Assets |
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The new 2008 Economic Stimulus Act includes several provisions that will benefit businesses by providing enhanced expensing and depreciation provisions for equipment purchased and placed into service in 2008. This tax relief will encourage businesses to make investments that will enable them to keep growing, and the requirement for investment in 2008 will achieve the stimulus bill's goal of injecting money into the economy right away.
Will You Get a Cash Rebate? |
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As part of the economic plan to stimulate the economy, the government will be sending rebate checks to most taxpayers. There are many factors to consider, such as who qualifies for the rebate, how is it calculated, what does a taxpayer need to do, if anything, to get the rebate, and how does the rebate affect a taxpayer’s return for 2008. These rebates are actually advance payments for a new refundable tax credit called the Recovery Rebate Credit (RRC). This credit will be claimed on a taxpayer’s 2008 tax return. The rebates are, in fact, an advance payment of the new RRC and must be accounted for when a taxpayer files for his or her 2008 tax return in 2009.
Years of Inflation and the AMT Pose a Growing Tax Threat |
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Your tax will be the higher of the tax computed the regular way or the Alternative Minimum Tax. Anticipating when the AMT will affect you is difficult, because it is usually the result of a combination of circumstances. In addition to those items listed above, watch out for transactions involving limited partnerships, depreciation and business tax credits only allowed against the regular tax. All of these can strongly impact your bottom line tax and raise a question of possible AMT.
Tax Tip: If you were subject to the AMT in the prior year and had a state tax refund in that year, part or all of your state income tax refund from that year may not be includable in the regular tax computation. To the extent you received no tax benefit from the state tax deduction because of the AMT, that portion of the refund is not includable in the subsequent year’s income.
2008 Inflation Adjustments |
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Every year, many of the various tax limitations, deductions, allowances, etc., are inflation adjusted. The following are the more commonly-encountered values that apply to 2008.
Click here for the table.These are not the only items that are inflation adjusted. If you have questions regarding other limitations not listed here, please call.
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