Small Business Tax-Change Scorecard for '11
How will the Tax Relief and Unemployment Insurance Reauthorization, and Job Creation Act of 2010 change your business tax year? Check out tax expert Barbara Weltman's summary of changes for the long and shot of it. Here are the top points to ponder.
1. Employee payroll-tax cut. The Social Security deduction from payroll will be 4.2 percent in 2011 instead of 6.2 percent. And that includes solopreneurs.
2. Tax breaks saved. A number of business tax breaks that were to expire in 2009 have been renewed. Among the key credits are research credit and new-markets credit, as well as empowerment-zone incentives. The credit for alternative-energy vehicles wasn't renewed.
3. Stock sales. Extended through 2011 is the 100 percent exclusion of gain from selling stock in a small business.
4. Bonus depreciation. Extended through 2011 is the 100 percent depreciation for new business equipment.
5. Work opportunity credit. This new-hire credit has been extended through December, although unemployed veterans and at-risk youth as target groups have been dropped.
6. Alternative minimum tax. Limits have been extended.
7. Tax rates. 2010 tax rates were extended through 2012, with the top rate staying at 35 percent.
