House Passes Tax Extenders Bill

From the Journal of Accountancy:

Friday, the House of Representatives passed the American Jobs and Closing Tax Loopholes Act (HR 4213) by a vote of 215–204. The bill now goes to the Senate, which will not take it up for consideration until after it returns from its Memorial Day recess on June 7.

The bill as passed by the House extends a large number of expired tax provisions through 2010. These include the IRC § 41 research credit, the standard deduction for state and local property taxes, and the deduction for state and local sales tax.

To read the rest of the article, click on the link below.

House Passes Tax Extenders Bill

Tax Information for Members of the Armed Forces

Happy Memorial Day!

If you are a veteran or are on active duty, thank you! I thought I would take this opportunity to post the link to an IRS page dedicated to providing information to members of the armed forces. http://www.irs.gov/newsroom/article/0,,id=97273,00.html

Also here are links to Publication 3, Armed Forces' Tax Guide. There is an online version and a PDF.
Online: http://www.irs.gov/publications/p3/index.html
PDF:    http://www.irs.gov/pub/irs-pdf/p3.pdf

If you would like a paper copy of the document, contact the IRS by telephone. 1-800-829-3676

401k and IRA Rollovers Provide Tax-Free Business Start-Up Funding (Sounds like a good idea, but . . .)

Have you heard of Rollovers for Business Startups or ROBS? It sounds like a great idea, except for one small problem which I will get to in a minute. With ROBS, you use a 401(k) or IRA distribution to fund a new business and avoid taxes and penalties on 401(k) or IRA distributions. The idea is to form a new corporation, set up a new 401(k), rollover the funds into the new 401(k), and then use the funds to purchase stock in the new corporation.

Sounds like a great idea doesn’t it? Here is the small problem I mentioned earlier. The IRS is examining these plans, and in October 2008 even issued a memo saying that some of these plans may violate tax law. The plans may also violate some rules affecting pensions, so the IRS and Department of Labor are working together.

Read this article posted on the Tax Prof Blog for more details.

401k and IRA Rollovers Provide Tax-Free Business Start-Up Funding