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.
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.
Capital Gains & Dividends Bargain Extended for Two Years |
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Originally set to expire after 2008, the capital gains rates have been extended through 2010. In addition, the “zero” tax rates now apply to 2008 through 2010 instead of just 2008.
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