An Early Arrival of Christmas to the Taxpayers
By: Alex Rechenmacher

Congress recently passed and President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (“Act”). The Act, which was signed into law last Friday, December 17 extends several tax cuts in some areas that were already in place but set to expire while also creating some additional tax cuts.

Business owners have been presented some goodies to incentivize business growth and asset purchases next year. Since 2008, Congress has allowed businesses to claim an accelerated tax deduction for newly purchased assets, as much as 50% in the first year. In 2011, that provision was expanded to a 100% bonus depreciation for new additions of machinery, equipment and some leasehold improvements.

Individuals will also find appealing trinkets. You may recall that there was no tax on estates for individuals who passed away this year. Without action by Congress, estate taxes would have reappeared in 2011 at rates as high as 55% for any estate over $1 million in value. However, with the new legislation, that rate is reduced to 35%, and will only effect estates above $5 million in value. That means for a married couple that prepare their estate plans with care as much as $10 million could be passed to their heirs without taxation!

This Act is an illustration of the legislation and court decisions that the Law Offices of Edward P. Graham, Ltd. monitors for its impact on our clients. Schedule a conference with our office to learn how the new tax law will benefit you or your business.