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Dear Clients and Friends,
With Memorial Day right around the corner, summer days will not be far behind.Whether your summer plans include vacations, golf, backyard barbecues, or just relaxing in a lounge chair by your pool or at the beach, we hope this summer is a wonderful one for you.
We appreciate your business, your confidence in us, and your continued referrals.
Very truly yours,
Suzanne LoBiondo and Christopher Cheeseman
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Tax Incentives for Purchasing New Equipment
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For those businesses considering the purchase of new equipment, a reminder of some advantageous tax treatments for those purchases is below.
100 Percent Bonus Depreciation
The 2010 Tax Relief Act increases 50 percent bonus depreciation to 100 percent for qualified investments made after September 8, 2010 and before January 1, 2012. This means that the full cost of the equipment can be deducted currently in lieu of depreciating it over several years. The Act also makes 50 percent bonus depreciation available for qualified property placed in service after December 31, 2011 and before January 1, 2013. Unlike Code Sec. 179 expensing, it is not limited to use by smaller businesses or capped at a certain dollar level.
Code Sec. 179 Expensing
Congress has repeatedly increased the dollar and investment limits under Code Sec. 179 to encourage business spending. The 2010 Small Business Jobs Act increased the Code Sec. 179 dollar and investment limits to $500,000 and $2 million, respectively, for tax years beginning in 2010 and 2011. The 2010 Tax Relief Act provides for a $125,000 dollar limit (indexed for inflation) and a $500,000 investment limit (indexed for inflation) for tax years beginning in 2012 (and sunsetting after December 31, 2012).
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Some help for NJ Small Business Owners
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A recent change in New Jersey tax law permits individuals who generate income/losses from different types of business entities to offset gains from one type of business with losses from another. It also permits taxpayers to carry forward business-related losses for a period of up to 20 taxable years. Previously, New Jersey prohibited taxpayers from doing either.
Now business owners can combine their income/losses from four different categories: business profits; rent, royalties, patents or copyrights; shares from a partnership and shares from S corporations.
This law change is being phased in over 5 years beginning in 2012.
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C&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.