For small and large business owners alike, clarity was brought to several areas of taxation that have been in limbo. The following is a summary of the highlights.
- The payroll tax holiday for the Social Security tax was allowed to expire. Consequently, the employee-share of OASDI taxes reverts back to 6.2% (from 4.2%);
- 50% first-year bonus depreciation was also extended for one year by the Act. It now generally applies to property placed in service before January 1, 2014 (January 1, 2015, for certain property with longer production periods);
- The increased expensing amounts under Sec. 179 are extended through 2013. Maximum Section 179 deductions are capped at $500,000;
- The extension of 15-year straight-line depreciation for qualified leasehold improvements, qualified restaurant buildings and improvements, and
qualified retail improvements were extended through 2014; - Tax credits for businesses, including the Code Sec. 41 research credit and the Code Sec. 199 domestic production activities deduction, are generally extended through the end of 2013;
- Various energy credits are also extended; and,
- Unemployment benefits, which were set to expire at the end of 2012, are extended for the long-term unemployed through the end of 2013.
Feel free to call, e-mail, or schedule an appointment to discuss how these might affect you and how you can optimize opportunities in your specific situation.