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  • Writer's pictureTRS CPA



Here are highlights of the tax changes in the 2010 Small Business Act.

Depreciation Expensing Limits Increased

Increased Section 179 expensing from $250,000 to $500,000 for 2010 and 2011; phaseout of deduction begins after $2 million of eligible property purchased Up to $250,000 of qualified real property purchases can be expensed Bonus first-year depreciation (50%) extends through 2010 First year dollar cap for passenger autos increased from $3,060 to $11,060.

Deduction for startup expenses increased from $5,000 to $10,000 and the phaseout threshold is increased from $50,000 to $60,000.

Five-year carryback of small business unused general business credits

One year self-employment tax break. For 2010, when calculating self-employment taxes, the deduction for health insurance costs of a self-employed taxpayer can be deducted in computing net earnings from self-employment.

Information reporting for rental income. For payments made after December 31, 2010, persons receiving rental income from real property will have to file 1099 forms reporting payments of $600 or more for rental property expenses. Exceptions are provided for individuals temporarily renting principal residences and taxpayers whose rental income is under an IRS-determined limit.

-Code Sec. 457(b) plans could include Roth accounts.For tax years beginning after December 31, 2010, retirement savings plans sponsored by state and local governments will be able to include Roth accounts.

Accelerated estimated tax payment for large corporations. Estimated taxes for large corporations otherwise due July, August or September of 2015, will be increased by 36%.

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