Disclaimer of Liability
The information in this e-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice,
accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used
as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or
taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular
situation.
The author of the tax articles in this e-newsletter did not intend nor write the advice to be used to avoid any penalty imposed by a
taxing authority, nor may any user/recipient of this document use this document's written tax advice for that purpose. This document's
tax advice was written specifically to support the promotion or marketing of the transaction/matter addressed by the written tax advice.
Therefore, any user/recipient of this document should seek an independent tax professional's advice regarding the user/recipient's
particular circumstances.
The information is provided "as is" with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and
without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for
a particular purpose.
The information in this e-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice,
accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used
as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or
taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular
situation.
The author of the tax articles in this e-newsletter did not intend nor write the advice to be used to avoid any penalty imposed by a
taxing authority, nor may any user/recipient of this document use this document's written tax advice for that purpose. This document's
tax advice was written specifically to support the promotion or marketing of the transaction/matter addressed by the written tax advice.
Therefore, any user/recipient of this document should seek an independent tax professional's advice regarding the user/recipient's
particular circumstances.
The information is provided "as is" with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and
without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for
a particular purpose.
| Serving the Central Pennsylvania area since 1981 |
| Robert A. Romako, CPA |
| New Tax Provisions for Businesses and the Self-Employed |
Congress has recently enacted several special tax provisions for businesses and self-employed
individuals. Designed to provide an economic stimulus, the changes provide an opportunity for
some businesses to significantly reduce, or even eliminate, all corporate-level taxes in 2010, as
well as reduce personal income and self-employment taxes for unincorporated entities. But, for
many provisions, the window to act is relatively short. Presented below are the major
opportunities:
• Expanded Section 179 expensing. The maximum amount of purchases eligible for
immediate expensing has been increased to $500,000 for 2010 and 2011. “Eligible property”
generally means machinery, equipment, furniture and software, and included both new and used
property. The maximum expensing amount phases out once purchases exceed $2 million.
• Expensing for real property. For the first time, certain real property is eligible for
immediate expensing. For 2010 and 2011, the $500,000 Section 179 expensing limit can include
up to $250,000 of qualified real property (leasehold improvements, restaurant property, and retail
improvement property).
• Extension of 50% bonus depreciation. The ability to write off 50% of the cost of new
tangible personal property has been extended for assets acquired in 2010. This has been made
retroactive to include assets acquired since January 1, not just those acquired since the date of
enactment.
• General business credits carryback. Beginning in 2010, unused general business
credits (from installing energy credit property, employment credits, tip credits, etc.) can be carried
back 5 years. Eligible small businesses consist of sole proprietorships, partnerships, and non-
publicly traded corporations with $50 million or less in average annual gross receipts.
individuals. Designed to provide an economic stimulus, the changes provide an opportunity for
some businesses to significantly reduce, or even eliminate, all corporate-level taxes in 2010, as
well as reduce personal income and self-employment taxes for unincorporated entities. But, for
many provisions, the window to act is relatively short. Presented below are the major
opportunities:
• Expanded Section 179 expensing. The maximum amount of purchases eligible for
immediate expensing has been increased to $500,000 for 2010 and 2011. “Eligible property”
generally means machinery, equipment, furniture and software, and included both new and used
property. The maximum expensing amount phases out once purchases exceed $2 million.
• Expensing for real property. For the first time, certain real property is eligible for
immediate expensing. For 2010 and 2011, the $500,000 Section 179 expensing limit can include
up to $250,000 of qualified real property (leasehold improvements, restaurant property, and retail
improvement property).
• Extension of 50% bonus depreciation. The ability to write off 50% of the cost of new
tangible personal property has been extended for assets acquired in 2010. This has been made
retroactive to include assets acquired since January 1, not just those acquired since the date of
enactment.
• General business credits carryback. Beginning in 2010, unused general business
credits (from installing energy credit property, employment credits, tip credits, etc.) can be carried
back 5 years. Eligible small businesses consist of sole proprietorships, partnerships, and non-
publicly traded corporations with $50 million or less in average annual gross receipts.
DECEMBER 2010 NEWSLETTER ARTICLE
| Robert A. Romako, CPA 220 Haldeman Avenue New Cumberland, PA 717.774.3047 |