On January 2, President Obama signed the "American Taxpayer Relief Act of 2012" (ATRA) into law. The law averted the so-called "Fiscal Cliff" and prevented the expiration of many of the tax provisions put in place during the Bush administration. Here is a summary of some of the changes included in the new tax law that may apply to your business:
- Bonus first-year depreciation has been extended for one year. The new law extends the 50% first-year bonus depreciation allowable for qualified property placed in service before January 1, 2014. In addition, the rules treating qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property as 15-year property have also been extended through 2013.
- Section 179 expensing amounts have been increased for 2012 and 2013 to $500,000. The cap on eligible purchases has been increased to $2,000,000. An extension has been granted to allow up to $250,000 of qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property, to be eligible for expensing under code Section 179.
- The allowable increase in first-year deprecation for autos and trucks of $8,000 has been extended through 2013.
- The Work Opportunity Tax Credit has been extended through 2013.
- The Research Credit has been reinstated for 2012 and has been extended so that it applies for amounts paid or accrued before January 1, 2014.
- Permanently extends the exclusion from income and employment taxes of employer-provided education assistance up to $5,250.
- The exclusion of 100% of gain from the disposition of qualified small business stock has been extended to include qualified stock acquired after September 27, 2010 and before January 1, 2014.
There are numerous additional provisions included in the new tax law. Please contact your BerryDunn advisor to discuss how the new tax law will affect you, your family, and your business.
For details about how the tax changes may affect you individually, see our related article here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.