Understanding the Impact of Proposed Tax Changes
Posted 11-11-2009 | By Jim Redpath | Download Article
As seen in Minnesota Business Experts' Forum
President Obama’s tax proposals continue to be discussed and debated since the May 2009 release of “General Explanations of the Administration’s Fiscal Year 2010 Revenue Proposals,” also known as the “Green Book.”
The Green Book includes an outline of budget proposals and tax changes. If you are a business owner, I encourage you to become educated and aware of the proposed changes, to monitor discussions in Washington, D.C, and to determine how the changes may affect your organization.
The proposals are big news for the business community. It does not matter if you agree or disagree with the proposed tax changes – most businesses will feel an impact.
We will not know the final outcome of the proposed changes until the President’s budget passes through Congress. However, following is a brief listing of some of the major proposed changes in the Green Book for businesses.
Key proposals for businesses (with estimated beginning year):
- Repeal LIFO (2012)
- Make research and development tax credit permanent (2010)
- Expand net operating loss (NOL) carryback (2011)
- Eliminate capital gains taxation on small businesses (2014)
- Treat income from carried (profit) interests in partnerships as ordinary income(2011)
- Require information reporting for rental property expense payments (2010)
- Require information reporting on payments to corporations (2010)
- Repeal Lower-of-Cost-or-Market Inventory Accounting Method (year after enactment)
- Reform U.S. International Tax System (2011)
- Combat under-reporting of income through use of accounts and entities in offshore jurisdictions (year after enactment)
- Implement standards clarifying when employee leasing companies can be held liable for their client’s Federal employment taxes (2010)
- Deny deduction for punitive damages (2011)
- Increase information return penalties (2011)
- Repeal expensing of intangible drilling costs for oil and gas companies (2011)
- Repeal percentage depletion for oil and gas wells (2011)
- Repeal domestic manufacturing deduction for oil and gas production (2011)
JIM REDPATH
CEO
HLB Tautges
Redpath, Ltd.
jredpath@hlbtr.com