We just released the April/May issue of The Bottomline, HFTP’s bi-monthly publication. The issue’s general theme features articles on:
- How to navigate the Tax Relief Act
- How organizations managed HR in a slow economy
- Updates to the enterprise communication system — Exchange
- What’s new in PCI version 2.0
- How network security breaches impact hotel guests’ satisfaction
- HFTP Global Board meets to strategize for the future
Article Excerpt From the Issue
Navigating the Tax Relief Act
From tax cut extensions to depreciation incentives, what you need know about the new legislation
By Christopher Hesse, CPA
It’s been a few months since the U.S. Tax Relief Act — passed in the waning days of 2010 — unburdened American business owners of the uncertainty that badgered their tax and strategic planning efforts. Beyond extending the Bush-era tax cuts, the legislation provided an important depreciation incentive for businesses and a new 2011 tax break for individuals. And, beginning in 2011, the estate tax is restored, but with an improved exemption and rate.
Now that the cries of celebration have quieted, it’s time to take a good look at what these provisions actually mean for you. Let’s break them down.
Continuation of Individual Income Tax Rates
This legislation extends the 2010 income tax rate structure in its entirety for two years (through 2012). This includes a zero percent capital gain and dividend rate for taxpayers in the two lower brackets, and a 15 percent capital gain and dividend rate for all others.
Improved Bonus Depreciation on Business Equipment and Property
Expansion to a 100 percent (vs. 50 percent) first-year bonus depreciation deduction
for new machinery and equipment, and certain real estate leasehold improvements.
Business Provisions Extended
Renewal of a broad array of business tax breaks that expired at the end of 2009, with most extended through 2011, including: research and development tax credit, 15-year depreciable period for certain leasehold improvements and enhanced charitable deductions for businesses.
Individual Extenders Rolled Forward
A long list of individual income tax “extenders” (provisions that Congress must renew frequently) have been restored for 2010 and, in general, extended through 2011.
Payroll Tax Cut For 2011
The social security tax on the employee share of wages is reduced from 6.2 to 4.2 percent for 2011. However, there is no change to the employer share.
Estate Tax Restoration
For 2010 only, there was no federal estate tax. However, beginning in 2011, the estate tax and generation-skipping transfer tax is restored.
Eliza Selig is director of communication for HFTP and editor of The Bottomline, a bi-monthly publication available for members of HFTP.