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Budget Control Act of 2011
NYC Tax Rates Extended
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suzanne

Suzanne LoBiondo, CPA

516-791-1303

  
 
 
Chris

Chris Cheeseman, CPA

516-791-1303

Dear Clients and Friends, 

  

As the end of the summer approaches, we'd like to remind you that business tax returns on extension are due September 15, and individual returns are due October 15. Please contact us as soon as you have your information ready so we can prepare those returns for you timely.  

 

We know that the economy is a bit shaky right now but we are hopeful that things will pick up over the next months.  In the meantime, feel free to contact us with any questions or concerns you may have.

 

We'd like to thank you for your continued faith in us as your trusted advisors.  

 

Very truly yours,

  

Suzanne LoBiondo and Chris Cheeseman 

Budget Control Act of 2011

On August 2, President Obama quickly signed the Budget

Budget Control Act after passage by the House and Senate.  The Act cuts spending but includes no revenue raisers at this time.  Some

of the major highlights are below.

 

  • The law allows debt ceiling increase by as much as $2.4 trillion dollars in total.
  • The agreement calls for cuts of more than $900 billion over ten years in spending from programs, agencies and day-to-day spending.
  • The agreement creates a 12-person House and Senate special committee to identify further spending cuts. The committee must complete its work in time to be voted on by Congress before year end. The committee could overhaul the tax code or find savings in benefit programs like Medicaid, Medicare or Social Security. Congress could not modify the committee's recommendation.
  • Should the special committee deadlock or should Congress reject the committee's recommendations, then automatic across the board spending cuts of at least $1.2 trillion would go into effect.
  • The compromise does not include any immediate revenue additions or tax increases.

The president said the agreement requires that both major political parties work together on a larger plan to cut the federal budget deficit, which he said is important for the long-term health of the U.S. economy.

Obama said the plan would need to include cuts to social programs, a move that many Democrats oppose, and higher taxes, which many Republicans reject.  Neither option was included in the compromise legislation.

 

We will continue to keep you updated on future changes to Budget Legislation.

 

New York City ~ Corporate, Personal Income Taxes: Various Income Tax Rates Extended, Rate Cuts Postponed

Recently signed legislation extends existing New York City corporate and personal income tax rates and delays the implementation of new, lower rates.

 

The existing tax rates for the New York City personal income tax are extended for an additional three years, and, subsequently, the lower rates are delayed for three years. The rates had been scheduled to drop effective for taxable years before 2012, but will now drop effective for taxable years before 2015. 

 

The bill extends the authority of the city to impose the city minimum personal income tax at 2.85% for an additional three years. The rate was scheduled to fall to 2.5% beginning in 2012. 

 

The legislation also authorizes New York City to impose the additional personal income tax surcharge on the New York City taxable income of city residents, estates and trusts for an additional three years at the rate of 14% of the city personal income tax, and extends New York City's authority to reduce the additional tax by local law for taxable years beginning before 2015.

 

The current New York City general corporation tax rate is also extended. The current tax rate is the greater of 8.85% on income, .15% on business and investment capital, 8.85% of 15% of income plus the amount of compensation paid to any person who owned more than 5% of the capital stock, or a minimum tax based on the amount of New York City receipts. There is also a 0.075% tax on subsidiary capital. On January 1, 2012, the rates were scheduled to drop to 6.7%, .10%, 6.7% and $25, respectively, and 0.05% on subsidiary capital. The amendments will continue the current rates until December 31, 2014.

 
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.