S Corp Income
Small Business Jobs Act of 2010 Offers Tax Incentives for Businesses of All Sizes
On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010 , or H.R. 5297 (hereafter, “the Act”). Though many of the Act’s provisions focus on small businesses , the new law also contains tax incentives that apply to all businesses as well as new retirement savings incentives for individuals . It is important to note that some of these provisions offer taxpayers a very small window of opportunity, requiring action before the end of the year to take advantage of the savings. INCENTIVES FOR ALL BUSINESSES The Act enhances and extends a number of tax incentives that were originally included in the Economic Stimulus Act of 2008 (“the 2008 Stimulus Act”) and the American Recovery and Reinvestment Act of 2009 (“the. Read More.
Have You Developed a Year-End Tax Strategy? Time Is Running Out
As 2009 closes in just a few days, there are some important tax changes that will help you save money and prepare to file your 2009 tax return in the spring. We have summarized many of the major changes in our blog post, “Tax Planning Strategies & Year-End Considerations” in November, and since it has been one of our most popular posts, we’ve reposted it here and encourage you to review this information again before starting the process for your 2009 tax return.
Final Regulations Limit Deferral of S Corp Income through Open Account Debt
As of October 20, 2008, final IRS regulations limit the ability of shareholders to increase loans to their S corp as an attempt to defer income by increasing their debt basis. Specifically, open account debt that exceeds a $25,000 threshold must be treated as separate debt and is subject to basis and income reporting rules. The change in regulation is in response to T.C. Memo. 2005-204, which did not limit a shareholder’s ability to defer income as long as payment continued on open account debt.
Open account loans exist when the shareholder making the loan does not hold a related debt