The era of hope and change looks surprisingly like 2002. The text of the House Ways and Means tax bill is now available (hat tip: Benefitsblog), and its business proposals take us to the future by going back seven years:
- a five-year carryback for NOLs incurred in 2008 or 2009;
- 50% bonus depreciation for property placed in service in 2009.
- Extension of $250,000 bonus depreciation through 2009.
The bonus depreciation and Sec. 179 provisions extend current law one extra year.
The NOL provisions allow 100% offset of alternative minimum taxable income for the carrybacks. They also allow taxpayers to carryback only two years, rather than five. TARP recipients are shut out of the five-year carrybacks.
There are a few provisions that aren't reruns of Bush stimuli. Taxpayers with income up to $75,000 of AGI ($150,000 for joint filers) get a "Making Work Pay" credit of up to $500, or $1,000 on joint returns. So your $75,000 job doesn't pay now, but an extra $500 will make all the difference, apparently.
The bill also repeals the requirement that taxpayers receiving the first time homebuyer "credit" repay the amounts. Now the IRS goes from being the lender of first resort straight into the down-payment assistance business.
The bill also includes some other miscellaneous credits, including a temporary increase in the earned income credit and some new education credit provisions.
Dr. Maule correctly notes: "Just Because It Didn't Work the First 50 Times Doesn't Mean It Will Work Next Time."
Hope and Change, indeed.
The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to