Monthly Archives: January 2010

Double tax benefit for NOLs

The new "Worker, Homeownership and Business Assistance Act of 2009" extends and expands the tax break for net operating losses (NOLs) created by the 2009 economic stimulus law. What's more, some business owners may be able to realize a double tax benefit. Here's a quick recap: A business can normally carry back an NOL for [...]

New Rules for Children of Divorced or Separated Parents

Revocation of release of claim to an exemption. For tax years beginning after July 2, 2008 (the 2009 calendar year for most taxpayers), new rules apply to allow the custodial parent to revoke a release of claim to exemption that was previously released to the noncustodial parent on Form 8332, Release/Revocation of Release of Claim [...]

Increase in Limit on Long-Term Care and Accelerated Death Benefits Exclusion

2009 The limit on the exclusion for payments made on a per diem or other periodic basis under a long-term care insurance contract increases for 2009 to $280 per day. The limit applies to the total of these payments and any accelerated death benefits made on a per diem or other periodic basis under a [...]

IRS raises per diems for 2010

Keeping detailed records of employee travel expenses is a hassle. But there's a way your business can simplify matters without any tax downside: Use the IRS-approved "per diem rates". This way, employees don't have to account for every last cup of coffee or cab ride.  The reimbursements are tax-free to the employees up to certain [...]

Income Averaging for Farmers and Fisherman

Exxon Valdez litigation. If you received qualified settlement income made up of interest and punitive damages in connection with the civil action In re Exxon Valdez, No. 89-095-CV (HRH) (Consolidated) (D. Alaska), you may treat this settlement payment as income from a fishing business for the purpose of income averaging. You are eligible to make [...]

Home/Residence-Related Tax Changes

Discharge of Qualified Principal Residence Indebtedness The Emergency Economic Stabilization Act of 2008 extended the exclusion from gross income for the discharge of qualified principal residence indebtedness by an additional 3 years. The exclusion now applies to debt discharged after 2006 and before 2013. First-Time Homebuyer Credit First-Time Homebuyer Credit Extended to April 30, 2010; [...]

New mortgage interest break

The tax law permits generous deductions for mortgage interest paid in connection with "acquisition debt" and "home equity debt" of a qualified residence. Now a new ruling from the IRS says that you can combine these two breaks on an initial mortgage (IRS Chief Counsel Advice 200940030). Under the tax law, "acquisition debt" is any [...]

Health/Medical-Related Tax Changes

Archer Medical Savings Accounts (MSAs) 2010 Changes For Archer MSA purposes for 2010, the minimum annual deductible of a high deductible health plan increases to $2,000 ($4,050 for family coverage). The maximum annual deductible of a high deductible health plan increases to $3,000 ($6,050 for family coverage). The maximum out-of-pocket expenses limit increases to $4,050 [...]

Simplified Employee Pension Plan

What is a SEP? A SEP is a simplified employee pension plan. A SEP plan provides employers with a simplified method to make contributions toward their employees’ retirement and, if self-employed, their own retirement. Contributions are made directly to an Individual Retirement Account or Annuity (IRA) set up for each employee (a SEP-IRA). Note: The [...]

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