Saturday, November 6, 2010

2010 Tax Changes

There have been a lot of changes that have gone into effect for this year and that affect planning for next year as well. For individuals, there is the opportunity to convert traditional IRA retirement accounts to Roth IRA accounts and pay the tax over two years instead of all at once and without regard to income limits (prior to this year and after this year income limitations will apply again). Also there is still the chance to take advantage of energy efficient improvements to your principal residence, some of these credits expire after the end of this year. Considerations for 2011 include whether tax rate reductions will be retained or if resetting of rates will take effect and automatically increase taxes for income levels (mainly because the 10% tax bracket will be eliminated and so lower income people will be affected to a greater amount).

For small businesses, there is a tax credit if you provide health insurance for non-owners or family of owners, subject to certain limits for wages and number of employees. Businesses also are continuing to be incentivized to make capital improvements through increased section 179 expense limitations.

This is just a quick summary. I will try to share other impacts over the next few entries. Please take some time to review this year to avoid surprises at tax time while you can still make changes before year end.

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