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In This Issue
Stay Tuned for Possible Tax Rate Reductions & Extenders
Small Business Jobs Act of 2010
Moving to Serve You Better
About C&L
Stay Tuned!
congressIndividual tax rate reductions and tax extenders are at the top of the list on Congress' fall agenda.  Other items on the agenda are the Federal estate tax, reduced capital gains/dividends tax rates, an AMT "patch", and energy tax incentives.  Stay tuned to future newsletters to find out more about these items as they are addressed.
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Suzanne LoBiondo, CPA
516-791-1303

suzanne
 
Christopher Cheeseman, CPA
516-791-1303
Chris
Dear Clients and Friends,
 
It seems that October not only brings about a change of weather, but other changes as well. Of note are two items that may affect you.

First, on September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010.  The new law contains $12 billion in tax incentives. The tax title's "small business" label does not reflect its true scope, because its provisions impact businesses of many sizes. Some of the highlights of the law are detailed below.

Second, C&L Tax and Accounting Services LLP is moving to a more modern office to serve you better. As of November 1, 2010, we will be located at:

2116 Merrick Ave, Suite 4002
Merrick , NY  11566-3411

Our telephone, fax and email addresses remain the same.

Very truly yours,

Suzanne LoBiondo, CPA
Christopher Cheeseman, CPA
Highlights of the Small Business Jobs Act of 2010
Below are several highlights of the Small Business Jobsmall businesss Act of 2010. Keep in mind that this is a brief summary of the Small Business Jobs Act.  If you think any of these provisions apply to you, please contact us at 516-791-1303.

Bonus Depreciation - The 50 percent first-year bonus depreciation, which had originally expired at the end of 2009, has been extended through December 31, 2010.  This is retroactive to January 1, 2010. 

Code Sec. 179 Expensing - Eligible taxpayers may elect to claim a Code Sec. 179 expense deduction on qualified property purchased.  Under current law, the maximum deduction for 2010 is $250,000.  The dollar limit is reduced by the amount by which the cost of qualifying property placed in service during the year exceeds $800,000. For 2011, the expensing limit had been scheduled to revert to prior levels of $25,000 and $200,000 respectively. The new law increases the maximum deduction to $500,000 and the investment limit to $2 million for tax years beginning in 2010 and 2011.

S Corp Built-in-Gain Period - A C corporation that converts to an S corporation generally must hold any appreciated assets for 10 years following the conversion or, if disposed of earlier, pay tax on the appreciation at the highest corporate level rate.  The American Recovery and Reinvestment Act of 2009 temporarily shortened the 10-year holding period to seven years for dispositions beginning in 2009 and 2010. The new law further shortens the holding period to five years for dispositions in any tax year beginning in 2011, if the fifth year in the recognition period precedes the tax year beginning in 2011.

Extended Carryback of General Business Credit - The new law extends the carryback period for eligible small business credits to five years, effective for credits determined in the taxpayer's first tax year beginning after December 31, 2009.

Qualified Small Business Stock - The 2009 Recovery Act temporarily increased the Code Sec. 1202 percentage exclusion for qualified small business stock sold by an individual from 50 percent to 75 percent for stock acquired after February 17, 2009 and before January 1, 2011, and held for more than five years.  The new law raises the exclusion to 100 percent for gain on stock acquired after the date of enactment of the bill and before January 1, 2011.  The five year holding period continues to apply.

Start-Up Expense Deduction - Taxpayers have generally been able to deduct up to $5,000 in qualified trade or business start-up expenses, reduced by the amount of the total start-up expenses that exceed $50,000.  The new law raises the deduction limit to $10,000 and increases the phaseout threshold to $60,000, for 2010 only.

Self-Employment Income - A self-employed individual can take a deduction for health insurance costs paid for the individual and his or her immediate family for income tax purposes. Under the new law, the deduction for the cost of health insurance is allowed in calculating net earnings from self-employment for purposes of self-employment taxes.  The provision applies to tax years beginning after December 31, 2009.

401(k) Rollovers to Roth Accounts - The new law authorizes 401(k), 403(b) and 457(b) governmental plans to allow participants to roll over qualified distributions, including in-service distributions, into a designated Roth account within their plans.  The rollover will be taxable, except for any after-tax contributions.  The provision is effective for distributions after September 27, 2010.  If an amount is rolled over in 2010, the amount is included ratably in income in equal amounts in 2011 and 2012, unless the taxpayer elects otherwise.

Every tax bill offsets its tax breaks with revenue raising provisions that are not quite so "friendly". Some of these provisions are as follows:

Information Reporting on Rental Property Expense Payments - The new law requires qualified individuals receiving rental income from real property to file information returns with the IRS and to service providers reporting payments of $600 or more during the year for rental property expenses.  This applies to payments made after December 31, 2010.

Higher Failure-To-File Penalties on Information Returns - The new law substantially increases the penalties for failing to timely file information returns with the IRS and to payees.
We are Moving to Serve You Better
C&L Tax and Accounting, LLP is pleased to announce that as of
November 1, 2010,
we will be located at:

2116 Merrick Ave
Suite 4002
Merrick , NY  11566-3411

Our telephone, fax and email addresses remain the same.

Phone: 516-791-1303
Fax: 516-791-1450

Suzanne LoBiondo, CPA
[email protected]

Christopher Cheeseman, CPA
[email protected]

www.clcpasllp.com
About C&L Tax and Accounting Services LLP
 
clC&L Tax and Accounting Services LLP is a boutique CPA firm that specializes in meeting the tax and accounting needs of individuals and small businesses. Our experienced tax and accounting professionals offer clients insightful and strategic tax planning and compliance services that maximize savings year after year.

C&L Tax and Accounting Services LLP's offers a wide range of tax and accounting planning, compliance and consulting services for both individuals and small businesses. We invite you to peruse our capabilities and contact us for a consultation.