The recently passed
2012 Taxpayer Relief Act prevents many of the business tax increases that were
scheduled to go into effect this year.
The following is a list of the major items extended:
- Retroactively extended for 2012 and 2013 the credit for research and development.
- 50 percent bonus first-year depreciation of new equipment with a useful life under 20 years expired at the end of 2012. The new law extends this until the end of 2013.
- The 50 percent bonus depreciation on leasehold improvements and qualified restaurant property is also extended through 2013.
- Asset expensing under Section 179 is increased for 2012 from $139,000 to $500,000. In 2013 the Section 179 deduction is increased from $25,000 to $500,000.
- The Work Opportunity Tax Credit (WOTC) is extended for 2012 and 2013. The credit reduces taxes up to $6,000 for employers who hire veterans and the long-term unemployed.
Congress also managed to squeeze in special corporate breaks for certain favored industries. These include special expensing breaks for TV and movies, investment companies, railroads, rum production in Puerto Rico and the Virgin Islands, and New York bonds. It's good to know that large political contributions still work for some industries.
Tomorrow I will cover the tax breaks for individuals.
Like any good CPA, I need to add a disclaimer: Unfortunately, it is impossible to offer comprehensive tax info over the Internet, no matter how well-researched or written. And remember, I love my readers, but having me bookmarked on your computer doesn’t make you a client: Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
