Tax Changes for Businesses | |
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Bad Check Penalty The minimum penalty for a bad check or money order has increased. Certain Timber Losses Certain income and expenses related to qualified timber property are no longer eligible in determining your net operating loss (NOL). Certain Transfers of Qualifying Geothermal or Mineral Interests A 25% exclusion from gross income is allowed for long-term capital gain from certain conservation sales of qualifying mineral and geothermal interests located on eligible federal land. Read on for more details... Depreciation and Section 179 Expense Section 179 deduction limits have increased, depreciation limits on certain electric vehicles have changed and the special depreciation allowance has changed for certain New York Liberty Zone property. Domestic Production Activities Deduction For tax years beginning in 2007, 2008, or 2009, the percentage used to figure the domestic production activities deduction increases to 6%. Employer-Owned Life Insurance Contracts Policyholders owning one or more employer-owned life insurance contracts may have to file a report. Federal Unemployment Tax Act (FUTA) Tax Rate The 6.2% FUTA tax rate has been extended through calendar year 2008. It was scheduled to decrease to 6.0% after 2007. Fringe Benefit Parking Exclusion and Commuter Transportation Benefit Monthly exclusion amounts have increased. Health Savings Accounts Dollar amounts have changed for 2007 and 2008. Maximum Automobile Value for Using the Cents-Per-Mile Valuation Rule An employer providing a passenger automobile for the first time for personal use by an employeeay use special rules for determining the value of the personal use. Nonqualified Deferred Compensation Plans There are new regulations on reporting requirements for amounts deferred under a nonqualified deferred compensation plan. Penalty for Erroneous Claim for Refund or Credit There is a new penalty if you file a claim for refund or credit of income tax in an excessive amount, and you did not have a reasonable basis for making the claim. Penalty for Late Filing of a Partnership Return The late filing penalty has increased. Penalty for Late Filing of an S Corporation Return A new penalty may be charged for late filed returns. Qualified Transportation Fringe Benefit The monthly limitation on qualified transportation fringe benefit exclusion amounts has increased. S Corporations There are several changes affecting S-corporations. Self-Employment Tax The maximum amount of net earnings subject to the social security part of the self-employment tax has increased. Social Security and Medicare Taxes The maximum amount of wages subject to the social security tax and Medicare tax has increased for 2007 and 2008. Standard Mileage Rate For 2007, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck is increased to 48.5 cents a mile for business miles driven. Work Opportunity Credit The work opportunity credit has been extended to cover individuals who begin work for you before September 1, 2011. The qualified veterans group and high-risk youth groups have been expanded. |
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