currently allowed. A list of some of the most pertinent credits/deductions that are schedule to expire as of December 31, 2011 can be found below:
Research credit. The research credit only applies for amounts paid or accrued before Jan. 1, 2012. This credit applies to taxpayer's expenditures on qualified energy research undertaken by an energy research consortium.
Work Opportunity Tax Credit (WOTC). The WOTC allows employers who hire members of certain targeted groups to get a credit against income tax of a percentage of first-year wages up to $6,000 per employee ($12,000 for qualified veterans; and $3,000 for qualified summer youth employees). The term "wages" for WOTC purposes doesn't include any amount paid or incurred for an individual who begins work after Dec. 31, 2011.
New energy efficient home credit. An eligible contractor can claim a credit of $2,000 or $1,000 for each qualified new energy efficient home either constructed by the contractor or acquired by a person from the contractor for use as a residence during the tax year. The credit won't apply to homes acquired after Dec. 31, 2011.
100% bonus depreciation. The 100% bonus depreciation allowance applies only for qualified property acquired and placed in service after Sept. 8, 2010 and before Jan. 1, 2012. For qualified property acquired and placed in service after Dec. 31, 2011 and before Jan. 1, 2013, a 50% bonus depreciation allowance will apply.
Expensing allowance. The maximum amount that may be expensed under Code Sec. 179 for tax years beginning in 2010 or 2011 is $500,000. For tax years beginning in 2012, the maximum amount will be $125,000. For tax years beginning in 2010 and 2011, the maximum annual expensing amount generally is reduced dollar-for-dollar by the amount of section 179 property placed in service during the tax year in excess of $2,000,000. For tax years beginning in 2012, the investment ceiling will be $500,000.
Empowerment Zone tax breaks. The designation of an economically depressed census tract as an "Empowerment Zone" makes businesses and individual residents within such a Zone eligible for special tax incentives. Empowerment Zone designations expire on Dec. 31, 2011.
Percentage depletion. For tax years beginning after Dec. 31, 2008, and before Jan. 1, 2012, the 100%-of-taxable-income limitation of percentage depletion for oil and gas from marginal wells applicable to independent producers and royalty holders owning interests in marginal wells is suspended. For tax years beginning on or after Jan. 1, 2012, the 100% of the taxable income limit returns for marginal wells.
These are just a small number of the changes that may come into play in 2012. Given the current political climate it is likely that there are many changes to come during the 2012 tax year. If you have any questions about how these changes may affect you or the best way to take advantage of the current tax laws please do not hesitate to contact us.
Research credit. The research credit only applies for amounts paid or accrued before Jan. 1, 2012. This credit applies to taxpayer's expenditures on qualified energy research undertaken by an energy research consortium.
Work Opportunity Tax Credit (WOTC). The WOTC allows employers who hire members of certain targeted groups to get a credit against income tax of a percentage of first-year wages up to $6,000 per employee ($12,000 for qualified veterans; and $3,000 for qualified summer youth employees). The term "wages" for WOTC purposes doesn't include any amount paid or incurred for an individual who begins work after Dec. 31, 2011.
New energy efficient home credit. An eligible contractor can claim a credit of $2,000 or $1,000 for each qualified new energy efficient home either constructed by the contractor or acquired by a person from the contractor for use as a residence during the tax year. The credit won't apply to homes acquired after Dec. 31, 2011.
100% bonus depreciation. The 100% bonus depreciation allowance applies only for qualified property acquired and placed in service after Sept. 8, 2010 and before Jan. 1, 2012. For qualified property acquired and placed in service after Dec. 31, 2011 and before Jan. 1, 2013, a 50% bonus depreciation allowance will apply.
Expensing allowance. The maximum amount that may be expensed under Code Sec. 179 for tax years beginning in 2010 or 2011 is $500,000. For tax years beginning in 2012, the maximum amount will be $125,000. For tax years beginning in 2010 and 2011, the maximum annual expensing amount generally is reduced dollar-for-dollar by the amount of section 179 property placed in service during the tax year in excess of $2,000,000. For tax years beginning in 2012, the investment ceiling will be $500,000.
Empowerment Zone tax breaks. The designation of an economically depressed census tract as an "Empowerment Zone" makes businesses and individual residents within such a Zone eligible for special tax incentives. Empowerment Zone designations expire on Dec. 31, 2011.
Percentage depletion. For tax years beginning after Dec. 31, 2008, and before Jan. 1, 2012, the 100%-of-taxable-income limitation of percentage depletion for oil and gas from marginal wells applicable to independent producers and royalty holders owning interests in marginal wells is suspended. For tax years beginning on or after Jan. 1, 2012, the 100% of the taxable income limit returns for marginal wells.
These are just a small number of the changes that may come into play in 2012. Given the current political climate it is likely that there are many changes to come during the 2012 tax year. If you have any questions about how these changes may affect you or the best way to take advantage of the current tax laws please do not hesitate to contact us.
No comments:
Post a Comment