Client Newsletters

For the second year in a row, the Social Security Administration announced that monthly Social Security and Supplemental Security Income benefits (SSI) will not automatically increase for 2011. In addition, other changes that take place based on the national average wage index will also remain unchanged.A recap of the key amounts is outlined here:

What does it mean for you?
If you depend on Social Security as a primary source of income, be prepared to tighten your belt. This is especially true as health insurance costs continue to rise. There is some hope, however, as Congress is considering instituting a one time payment to seniors of up $250 to help offset the lack of a cost of living raise.

With so many tax provisions expiring in 2009 and 2010, it makes planning your tax obligation difficult. What should you do?Outlined here are some of the key changes impacting 2010, including some suggestions to remain flexible if and when the law changes:

Deduction and Exemption Phase-out Eliminated. For 2010, your personal exemptions and deductions will not be subject to phase-out based on your income. The phase-outs are re-established in 2011.

Alternative Minimum Tax. The exemption levels drop back down in 2010 unless Congress acts to sustain higher exemption levels. For the past few years Congress has done just that, saving numerous taxpayers from this higher tax.

Domestic Production Activities Deduction. This deduction increases from 6% to 9% of qualifying business net income in 2010.

State and Local Sales Tax Deduction. Save any receipts that substantiate payment of large amounts of sales tax. If continued, you may opt to deduct either state income taxes OR the state and local general sales taxes paid as an itemized deduction.

Teachers Classroom Expense. If you are a teacher, assume you will be able to continue to deduct up to $250 of qualified out-of-pocket expenses for unreimbursed purchases of qualifying classroom supplies and materials.

Standard Deduction for Property Taxes. The option of using a standard deduction for $500 to $1,000 of real property taxes expires in 2009 unless extended.

Other Provisions Worth Watching. Other common tax code provisions that could be extended through 2010 include; direct contributions to charities from qualified retirement plans, waiver of minimum distributions from retirement accounts if over 70 years old, and the extension of the qualified tuition and educational expense deduction. In all these cases, once again, save any documentation required to take advantage of these options to retain flexibility if and when the tax law changes.

In addition to the tax provisions in the recently passed Small Business Jobs Act, the Act contains a combination of loan programs, and changes to government programs all to help stimulate business (and job) growth. Below are some of the key provisions to help stimulate business lending:

Extension of Small Business Association (SBA) Recovery Loans - this extension will provide the SBA with capacity to support $14 billion in loans to small businesses, beginning with the more than 1,400 businesses currently waiting in the Recovery Loan Queue.

Increase in the Loan Size for SBA Programs - the Act also increases the maximum loan size for SBA loan programs, which will allow more small businesses to access credit to expand and create new jobs. The Act permanently raises the maximum 7(a) and 504 loans from $2 million to $5 million, and the maximum 504 manufacturing related loan from $4 million to $5.5 million. The Act also temporarily increases the maximum loan size for SBA express loans from $350,000 to $1 million to increase access to working capital loans.

New Small Business Lending Fund - the Act establishes a $30 billion dollar fund providing capital to small banks with incentives to increase small business lending.

Creation of a New State Small Business Credit Initiative - the initiative will support at least $15 billion in small business lending, strengthening state small business programs that leverage private sector lenders.