Vernoia, Enterline + Brewer, CPA LLC

Posts tagged ‘Tax Code’

Competing proposals fuel tax reform discussions

Tax reform, frequently discussed in Washington, got a boost from two recent proposals, one from the chair of the House tax writing committee and another from the White House. Rep. Dave Camp, R-Mich., chair of the House Ways and Means Committee, released a massive tax reform bill in late February. In early March, President Obama released his fiscal year (FY) 2015 budget proposals, detailing over 160 tax proposals. Both proposals share some similarities but also key differences.

Camp’s plan

Camp unveiled a sweeping tax reform plan (the Tax Reform Act of 2014) that would leave almost no part of the Tax Code unchanged. Everyone-individuals, businesses, exempt-organizations, governmental entities-would be impacted in one way or another. Some of Camp’s far-reaching proposals are:

  • Consolidation of individual tax brackets
  • Higher standard deduction
  • Increased child tax credit
  • Revised treatment of capital gains and dividends with a 40 percent exemption
  • Repeal of alternative minimum tax (AMT)
  • Consolidated education tax incentives
  • Simplified tax return for seniors
  • Reform of charitable contribution deduction
  • Modified home mortgage interest deduction
  • Top corporate tax rate of 25 percent
  • Reform of rules for depreciation
  • Permanent research tax credit
  • Reform of the casualty loss rules

To pay for lower tax rates, Camp’s proposal would repeal many popular current tax incentives for individuals. They include the state and local sales tax deduction, higher education tuition deduction, student loan interest deduction, residential energy efficiency credits, adoption credit, and the itemized medical expense deduction. Many tax-advantage benefits of retirement plans would be curtailed or eliminated. Businesses also would lose many tax incentives, such as the Code Sec. 199 domestic production activities deduction, credits for production of fossil and alternative fuels, and the Work Opportunity Tax Credit. Camp’s plan would also repeal the like-kind exchange rules, the last-in, first-out (LIFO) method of accounting, and reform the rules for the treatment of travel and entertainment expenses. The foreign tax system would also be overhauled.

Camp did not propose to repeal the Patient Protection and Affordable Care Act. Camp did, however, propose to repeal the Affordable Care Act’s medical excise tax and prohibition of using health FSA dollars for over-the-counter medications. Camp has supported separate bills to delay the Affordable Care Act’s individual mandate but did not address this in his tax reform plan.

Obama’s proposals

President Obama’s FY 2015 budget renews a number of past proposals and makes some new proposals. New proposals include significant enhancements to the child tax credit and the earned income credit. President Obama did not go so far as Camp to propose reducing the number of individual tax brackets but he did call for reducing the value of certain exclusions and deductions for higher income individuals and imposing a minimum tax rate of 30 percent on individuals with adjusted gross incomes above $1 million. For homeowners, the President proposed to extend the now-expired exclusion for cancellation of certain home mortgage debt. In the education area, the President called on Congress to make permanent the AOTC.

As in his past budget proposals, President Obama also signaled his willingness to reduce the corporate tax rate but businesses would need to give up some tax incentives in exchange. These could include many of the so-called business tax extenders, such as special expensing rules for television productions, environmental remediation and similar ones. The President did propose to permanently increase Code Sec. 179 small business expensing to $500,000 with a $2 million investment limit. However, bonus depreciation would not be extended.

Outlook

Several of the President’s proposals are similar to ones from Camp. The President called for repealing the last-in, first-out (LIFO) method of accounting and many fossil fuel preferences. A new proposal would limit the amount of capital gain deferred under Code Sec. 1031 from a like-kind exchange of real property to $1 million per taxpayer per year, effective for exchanges completed after December 31, 2014. Both the President and Camp proposed to make permanent the research tax credit. They differed significantly on which other temporary incentives to continue or eliminate.

The GOP-controlled House is not expected to take up many of President Obama’s proposals, with the possible exception of some tax administration changes. The President’s budget received a more enthusiastic response from Senate Democrats, but passage in the Senate requires a supermajority of 60 votes, which Democrats lack. The outlook for Camp’s proposals is equally murky. As chair of the Ways and Means Committee, Camp may schedule hearings on his plan but the House GOP leadership ultimately must bring the bill to the full House for a vote, and it is unlikely to do so this year.

If you have any questions about the President’s proposals or Camp’s bill, please contact our office (908) 725-4414

How do I? Elect not to carry back an NOL

Many taxpayers find the ability to carry back a net operating loss (NOL) one of the most business-friendly provisions in the Tax Code. This is often true for new businesses. In times of economic difficulty, Congress has even relaxed the NOL carryback rules. However, there may be times when it is tax-advantaged not to carry back an NOL.

NOLs

An NOL arises when allowed deductions exceed a taxpayer’s gross income for a tax year. An NOL can be generated from business activity losses as a sole proprietor or partner in a partnership, among other activities. The rules for NOLs differ for different types of business structures. Generally, taxpayers can carry back an NOL for two years and then carry it forward for 20 years.

The decision not to carry back an NOL can be influenced by a variety of factors. These include the tax rates that may have been applicable to the years in which the NOL would be carried back. Taxpayers also need to consider the impact that an NOL would have on deductions, exemptions and credits. Taxpayers may also need to weigh the benefits of carrying back an NOL against the benefits of carryovers for other deductions.

Election

The election not to carry back an NOL is made by attaching a statement to a timely filed (including extensions) return for the year in which the NOL arose. The election must state that it is made under Code Sec. 172 and provide sufficient information to identify the election, the period to which it applies and the taxpayer’s basis or entitlement for the election.

The tax rules do not allow taxpayers to relinquish a portion of an NOL. The election must be to forgo the entire NOL. However, in certain limited cases, such as farming losses, there is some flexibility in the rules. The election also must relinquish the entire carryback period.

Once made, the election to relinquish an NOL carryback cannot be revoked without the permission of the IRS. However, there have been exceptions such as under the Worker, Homeownership and Business Assistance Act of 2009, which allowed taxpayers to revoke a previously made election not to carryback an NOL in order to take advantage of an extended carryback period under that law.

If you have any questions about electing not to carry back an NOL, please contact our office at (908) 725-4414.

Guidelines for keeping good records for tax season and beyond

Good recordkeeping is essential for individuals and businesses before, during, and after the tax filing season.

First, the law actually requires taxpayers to retain certain records for a specified number of years, for example tax returns or employment tax records (for employers).

Second, good record is essential for taxpayers while preparing their tax returns. The Tax Code frequently requires taxpayers to substantiate their income and claims for deductions and credits by providing records of various profits, expenses and transactions.

Third, if a taxpayer is ever audited by the IRS, good recordkeeping can facilitate what could be along and invasive process, and it can often mean the difference between a no change and a hefty adjustment. Finally, business taxpayers should maintain good records that will enable them to track the trajectory of their success over the years.

Here you will find a sample list of various types of records it would be wise to retain for tax and other purposes (not an exhaustive list; see this office for further customization to your particular situation):

Individuals

Filing status:

Marriage licenses or divorce decrees – Among other things, such records are important for determining filing status.

Determining/Substantiating income:

State and federal income tax returns – Tax records should be retained for at least three years, the length of the statute of limitations for audits and amending returns. However, in cases where the IRS determines a substantial understatement of tax or fraud, the statute of limitations is longer or can remain open indefinitely.

Paystubs, Forms W-2 and 1099, Pension Statements, Social Security Statements – These statements are essential for taxpayers determining their earned income on their tax returns. Taxpayers should also cross reference their wage and income reports with their final pay stubs to verify that their employer has reported the correct amount of income to the IRS.

Tip diary or other daily tip record – Taxpayers that receive some of their income from tips should keep a daily record of their tip income. Under the best circumstances, taxpayers would have already accurately reported their tip income to their employers, who would then report that amount to the IRS. However, mistakes can occur, and good recordkeeping can eliminate confusion when tax season arrives.

 

Military records – Some members of the military are exempt from state and/or federal tax; combat pay is exempt from taxation, as are veteran’s benefits. (In many cases, a record of military service is necessary to obtain veteran’s benefits in the first place.)

Copies of real estate purchase documents – Up to $500,000 of gain from the sale of a personal residence may be excludable from income (generally up to $250,000 if you are single). But if you own a home that sold for an amount that produces a greater amount of gain, or if you own real estate that is not used as your personal residence, you will need these records to prove your tax basis in your home; the greater your basis, the lower the amount of gain that must be recognized.

Individual Retirement Account (IRA) records – Funds contributed to Roth IRAs and traditional IRAs and the earnings thereon receive different tax treatments upon distribution, depending in part on when the distribution was made, what amount of the contributions were tax deferred when made, and other factors that make good recordkeeping desirable.

Investment purchase confirmation records – Long-term capital gains receive more favorable tax treatment than short-term capital gains. In addition, basis (generally the cost of certain investments when purchased) can be subtracted from gain from any sale. For these reasons, taxpayers should keep records of their investment purchase confirmations.

Substantiating deductions:

Acknowledgments of charitable donations – Cash contributions to charity cannot be deducted without a bank record, receipt, or other means. Charitable contributions of $250 or more must be substantiated by a contemporaneous written acknowledgment from the qualified organization that also meets the IRS requirements.

Cash payments of alimony – Payments of alimony may be deductible from the gross income of the paying spouse . . . if the spouse can substantiate the payments.

Medical records – Disabled taxpayers under the age of 65 should keep a written statement from a qualified physician certifying they were totally disabled on the date of retirement.

Records of medical expenses – Certain unreimbursed medical expenses in excess of 10 percent of adjusted gross income may be deductible.

Current health insurance policy – The new health care law requires most individuals to obtain minimum essential health coverage. If your employer has not provided you with records of coverage because you have your own policy, or for some other reason, you should be able to substantiate the amount of your coverage.

Mortgage statements and mortgage insurance  – Mortgage interest, premiums paid toward mortgage insurance, and real estate taxes are generally deductible for taxpayers who itemize rather than claim the standard deduction.

Receipts for any improvements to real estate – Part or all of the expense of certain energy efficient real estate improvements can qualify taxpayers for one or more tax credits.

Keeping so many records can be tedious, but come tax season it can result in large tax savings. And in the case of an audit, evidence of good recordkeeping can get you off to a good start with the IRS examiner handling the case, can save time, and can also save money. For more information on recordkeeping for individuals, please contact our offices.

Businesses

 

Taxpayers are required by law to keep permanent books of account or records that sufficiently substantiate the amount of gross income, deductions, credits and other amounts reported and claimed on any their tax returns and information returns.

Although, neither the Tax Code nor its regulations specify exactly what kinds of records satisfy the record-keeping requirements, here are a few suggestions:

State and federal income tax returns – These and any supporting documents should be kept for at least the period of limitations for each return. As with individual taxpayers, the limitations period for business tax returns may be extended in the event of a substantial understatement or fraud.

Employment taxes – The Tax Code requires employers to keep all records of employment taxes for at least four years after filing for the 4th quarter for the year. Generally these records would include wage payments and other payroll-related records, the amount of employment taxes withheld, reported tip income, identification information for employees and other payees; employees’ dates of employment; income tax withholding allowance certificates (Forms W-4, for example), fringe benefit payments, and more.

Business income – These would go toward substantiating income, and could include cash register tapes, bank deposit slips, a cash receipts journal, annual financial statements, Forms 1099, and more.

Inventory costs – Businesses should keep records of inventory purchases. For example, if an electronics company purchases a certain number of widgets for resale or a manufacturer purchases a certain number of ball bearings for use in the production of industrial equipment that it manufactures and sells. The costs of these goods, parts, or other materials can be deducted from sales income to significantly reduce tax liability.

Business expenses – Ordinary and necessary expenses for carrying on business, such as the cost of rental office space, are also generally deductable from business income. Such expenses can be substantiated through bank statements, canceled checks, credit card receipts or other such records. The cost of making certain improvements to a business, such as through buying equipment or renovating property, can also be deductible.

Electronic back-up

Paper records can take up a great deal of storage space, and they are also vulnerable to destruction in fires, floods, earthquakes, or other natural phenomena. Because records are required to substantiate most income, deductions, property values and more—even when they no longer exist—taxpayers (and especially business taxpayers) should digitize their records on an electronic storage system and keep a back-up copy in a secure location.

Business taxation can be extremely complicated, and the requirements for recordkeeping vary greatly depending on the size of the business, the form of organization chosen, and the type of industry in which the business operates. For more details on your specific situation, please call our offices.

Many tax planning questions arise after Supreme Court’s DOMA decision

On June 26, the U.S. Supreme Court held that Section 3 of the federal Defense of Marriage Act (DOMA) is unconstitutional (E.S. Windsor, SCt., June 26, 2013).  Immediately after the decision, President Obama directed all federal agencies, including the IRS, to revise their regulations to reflect the Court’s order.  How the IRS will revise its tax regulations – and when – remains to be seen; but in the meantime, the Court’s decision opens a number of planning tax opportunities for same-sex couples.

Background

The Supreme Court agreed in 2012 to hear an appeal of a federal estate tax case.  Due to DOMA, the surviving spouse of a same-sex married couple was ineligible for the federal unlimited marital deduction under Code Sec. 2056(a). The survivor sued for a refund of estate taxes. A federal district court and the Second Circuit Court of Appeals found unconstitutional Section 3 of DOMA, which defines marriage for federal purposes as only a legal union between one man and one woman as husband and wife.

Supreme Court’s decision

In a 5 to 4 decision, the Supreme Court held that Section 3 of DOMA is unconstitutional as a deprivation of the equal liberty of persons that is protected by the Fifth Amendment.  Writing for the five-justice majority, Justice Anthony Kennedy said that “DOMA rejects the long-established precept that the incidents, benefits, and obligations of marriage are uniform for all married couples within each State, though they may vary, subject to constitutional guarantees, from one State to the next.”  Kennedy explained that “by creating two contradictory marriage regimes within the same State, DOMA forces same-sex couples to live as married for the purpose of state law but unmarried for the purpose of federal law, thus diminishing the stability and predictability of basic personal relations the State has found it proper to acknowledge and protect.”

Chief Justice John Roberts, who would have upheld DOMA, cautioned that “the Supreme Court did not decide if states could continue to utilize the traditional definition of marriage.” Roberts noted that the majority held that the decision and its holding “are confined to those lawful marriages-referring to same-sex marriages that a State has already recognized.”

Tax planning

The Supreme Court’s decision impacts countless provisions in the Tax Code, covering all life events, such as marriage, employment, retirement and death.  The affect on the Tax Code cannot be overstated. It is expected that the IRS will move quickly to clarify how the decision impacts many of the more far-reaching provisions, such as filing status and employee benefits. Other provisions, especially the complex estate and gift tax provisions, will likely require more time from the IRS to issue guidance.

For federal tax purposes, only married individuals can file their returns as married filing jointly or married filing separately. Because of DOMA, the IRS limited these married filing statuses to opposite-sex married couples. The IRS is expected to issue guidance. Same-sex couples who filed separate returns may want to explore the benefits of filing amended returns (as married filing jointly), if applicable. Our office will keep you posted of developments.

Among the other provisions in the Tax Code affected by the Supreme Court’s decision are:

  • Adoption benefits
  • Child tax credit
  • Education tax credits and deductions
  • Estate tax marital deduction
  • Estate tax portability between spouses
  • Gifts made by spouses
  • Retirement plans

Looking ahead

Will the federal government look to where the same-sex couple was married (state of celebration) or where the same-sex couple reside (state of residence) for purposes of federal benefits? The Supreme Court did not rule on Section 2 of DOMA, which provides that no state is required to recognize a same-sex marriage performed in another state. At the time of the Supreme Court’s decision, 12 states and the District of Columbia recognize same-sex marriage.

In some cases, the rules for marital status are determined by federal regulations, which can be changed without action by Congress. In other cases, the rules are set by statute, which would require Congressional action. Sometimes, a federal agency follows one rule for some purposes but another rule for other purposes. Generally, the IRS has used place of domicile for determining marital status. Our office will keep you posted of developments.

If you have any questions about the Supreme Court’s decision and its impact on tax planning, please contact our office at (908) 725-4414.

 

FAQ: How are LLCs taxed?

An LLC (limited liability company) is not a federal tax entity. LLCs are organized under state law. LLCs are not specifically mentioned in the Tax Code, and there are no special IRS regulations governing the taxation of LLCs comparable to the regulations for C corporations, S corporations, and partnerships. Instead, LLCs make an election to be taxed as a particular entity (or to be disregarded for tax purposes) by following the check-the-box business entity classification regulations. The election is filed on Form 8832, Entity Classification Election. The IRS will assign an entity classification by default if no election is made. A taxpayer who doesn’t mind the IRS default entity classification does not necessarily need to file Form 8832.

“Check-the-Box” Election

An LLC with more than one member can elect:

  • Partnership
  • Corporation
  • S corporation (accomplished by electing to be taxed as a corporation, then filing an S corporation election)

An LLC with only one member can elect:

  • Disregarded entity
  • Corporation
  • S corporation (accomplished by electing to be taxed as a corporation, then filing an S corporation election)

The IRS will assign these classifications if no entity election is filed for an LLC (the default rules):

  • any business entity that is not a corporation is classified as a partnership
  • any entity that is wholly-owned by a single person will be disregarded as an entity separate from its owner (taxed as a sole proprietorship).

Typically, an LLC with more than one member will elect to be taxed as a partnership, whereas a single-member LLC will elect to be disregarded and taxed as a sole proprietorship.

If you have any questions relating to LLCs, their benefits, drawbacks, or their treatment under the Tax Code, please contact our offices at (908) 725-4414.

Tax penalties: sometimes good intentions are not enough

One morning you reach into your mailbox or bin to find the dreaded letter from the IRS announcing that you owe unpaid taxes. As if that wasn’t enough to induce panic, you may discover there are add-on charges for interest and penalties. Penalties for what, you may ask?

If you violate the Tax Code, the IRS may impose civil and/or criminal penalties, depending on the type of infraction committed. Civil penalties are commonly imposed for a failure to pay taxes when due, failure to report the correct amount of tax owed, a failure to deposit federal tax deposits, filing late, or even failing to pay because of a bounced check. There are more than 100 kinds of civil penalties in the Tax Code, ranging in severity. For example, a penalty for failure to file (separate and apart from a failure to pay) carries a minimum $100 fine, while a penalty for valuation overstatement can result in a 30 percent penalty on the amount of tax owed as a result. Criminal penalties can be even more severe, and may include terms of imprisonment as well as fines.

Taxpayers, return preparers, and third parties with some connection to the tax return in question may all become subject to penalties. Common civil penalties include failure to file tax returns, failure to pay taxes due, underpaying tax due to negligence, and valuation misstatements that result in inaccurate reporting of income (and therefore an incorrect amount of tax owed).

Criminal penalties are imposed for violations of federal Tax Code and Criminal Code, which include the willful (or intentional) attempt to evade or defeat any federal tax, the failure to collect or truthfully account for and pay any federal tax as required, or the failure to keep required records, supply required information or make required returns. Generally the IRS Criminal Investigations Division will conduct investigations into allegations of criminal tax violations, and if it recommends that the government prosecuted, the case could be referred to the IRS Office of Chief Counsel, the Department of Justice, the U.S. Attorney’s Office, or some combination of the three.

Hopefully you will never receive a letter from the IRS about either civil or criminal penalties. But if you do, please call our offices with any questions at (908) 725-4414.

Slowdown in progress of tax legislation in Congress

As summer arrives in Washington, so does the usual slowdown in legislative activity and 2012 appears to be no exception.  Lawmakers have a full plate of tax-related bills on their agenda but progress is slow at best as both parties prepare for the November elections.  Among the pending tax bills are proposals to extend bonus depreciation, enact small business tax incentives, renew many expired extenders, and more.

Bonus depreciation.  In 2010, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act provided for temporary 100 percent bonus depreciation.  Generally, 100 percent bonus depreciation was available for qualifying property placed in service after September 8, 2010 and before January 1, 2012 (or before January 1, 2013 in the case of property with a longer production period and certain noncommercial aircraft).

One hundred percent bonus depreciation is one of the few tax incentives on which Democrats and Republicans have found common ground.  President Obama has indicated his support for extending 100 percent bonus depreciation one additional year.  House Democrats introduced the Invest in America Now Act, which would extend 100 bonus depreciation through 2012 (through 2013 in the case of property with a longer production period and certain noncommercial aircraft).   The cost of repeal would be offset by denying the Code Sec. 199 domestic production activities deduction to oil and gas producers.

Reminder.  The 2010 Tax Relief Act also provided for 50 percent bonus depreciation for qualifying property placed in service before January 1, 2013 (or before January 1, 2014 in the case of property with a longer production period and certain noncommercial aircraft).

Small businesses.  Democrats and Republicans have unveiled competing small business tax bills.  The House approved a GOP-written bill, the Small Business Tax Cut Bill (HR 9).  Under the House bill, small businesses with fewer than 500 employees could claim a 20 percent deduction on qualified income in 2012. The deduction would be capped at 50 percent of qualified wages.

Meanwhile, Senate Democrats proposed their Small Business Jobs and Tax Relief Act of 2012 (Sen. 2237).  The bill would generally provide a 10 percent income tax credit on new payroll added by a qualified small employer in 2012. The credit would be capped at $500,000.  The Senate has not yet voted on the Democratic bill.

Tax incentives for small businesses have enjoyed bipartisan support in the past.  The GOP bill passed the House with Democratic support.  However, the GOP bill is not expected to be approved by the Senate if the bill comes up for a vote.

Bush-era tax cuts.  House Speaker John Boehner, R-Ohio, said in May that the House will vote on an extension of the Bush-era tax cuts before the November elections.  No legislation has been introduced and no vote scheduled.  It is unclear if House Republicans will propose extending the Bush-era tax cuts after 2012 without any offsets or if their bill will carry some revenue raisers.  House Republicans may also link an extension of the Bush-era tax cuts to spending cuts and budget reforms. The Budget Control Act of 2011 mandates across-the-board spending cuts in 2013 and beyond. In May, the House passed the Budget Sequestration Bill (HR 5652). The bill provides a substitute for the Budget Control Act.  The Senate is not expected to take up the Budget Sequestration Bill.

President Obama has reiterated his opposition to extending the Bush-era tax cuts for higher income taxpayers. The White House generally defines higher income taxpayers as individuals with incomes over $200,000 and families with incomes over $250,000.  Recently, some Democrats have spoken of higher thresholds, in the neighborhood of $1 million.  Lawmakers have also voiced the idea of a six-month or one-year extension of the Bush-era tax cuts.

Tax extenders.  It appears that lawmakers may not automatically renew all of the expired extenders as they have routinely done in past years.  In June, the chair of the Senate Finance Committee, Sen. Max Baucus, D-Montana, said that lawmakers should look at each extender and decide whether to eliminate it or make it permanent.  Baucus did not indicate which extenders should be made permanent and which should be jettisoned from the Tax Code. Among the likely candidates for being made permanent are the research tax credit, the higher education tuition deduction and the teachers’ classroom expense deduction.  All of these extenders have enjoyed bipartisan support.

Often included among the extenders is the so-called alternative minimum tax (AMT) patch.  The patch provides higher exemption amounts so the AMT does not encroach on middle income taxpayers.  The latest patch expired after 2011.  Proposals to extend the patch for 2012 have stalled, again over cost.  Lawmakers could leave the fate of the patch until after the 2012 elections.  However, late enactment of a patch would likely delay the start of the 2013 filing season because the IRS would need to reprogram its processing systems.

Pension funding.  Democrats and Republicans agree that the reduced interest rates on federal student loans should be extended one more year but disagree on how to pay for the estimated $6 billion cost of a one-year extension.  Changes to pension funding rules have been discussed as one way to pay for an extension of reduced federal student loan interest rates.

IRS budget.  The House and Senate are preparing for a showdown over the IRS’ fiscal year (2013) budget.  The House approved an $11.8 billion FY 2013 budget for the IRS budget.  The Senate is expected to approve a $12.5 billion FY 2013 budget.  Both amounts are, however, less than the funding levels requested by President Obama.  IRS Commissioner Douglas Shulman has warned Congress that reduced funding will negatively impact enforcement and customer service.  In FY 2012, Congress cut the IRS budget by $305 million and the agency responded by offering buyouts and early retirements to approximately 4,000 employees.

Transportation.  Agreement on a comprehensive transportation funding bill with tax offsets has eluded lawmakers.  The Senate passed the Moving Ahead for Progress in the 21st Century Act (MAP-21)(Sen. 1813). MAP-21 would provide parity among transit benefits, which had expired after 2011; allow Treasury to take a variety of measures against foreign financial institutions that engage in money laundering; and deny passports to individuals with seriously delinquent tax debt. House Republicans have a transportation bill but have not been able to pass it. Lawmakers are reportedly preparing another temporary extension of current funding.

Energy.  A number of energy tax incentives expired after 2011 and progress to renew them has stalled.  They include popular incentives for wind energy production and biomass fuels. President Obama proposed to repeal oil and gas tax preferences to pay for an extension of some of the energy incentives but lawmakers have shown little interest.

More proposals.  Many other tax bills are pending, including legislation to:

  • Extend or make permanent the American Opportunity Tax Credit
  • Repeal the excise tax on medical devices
  • Revise health flexible spending arrangement rules for over-the-counter medications
  • Extend the enhanced Work Opportunity Tax Credit for veterans
  • Provide for tax rate parity among tobacco products
  • Repeal the federal estate tax
  • Enhance tax-exempt bonds
  • And more

If you have any questions about pending tax legislation, please contact our office for more details (908) 725-4414.