What's in the Tax Bill and Will it Really Help Your Business?

As you may have heard, last night the House passed the "Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010" (H.R. 4853) which passed in the Senate earlier this week. The bill is now headed to the White House, where it is expected to be signed into law today.

While the intent of the bill is to extend many of the 2001 and 2003 Bush tax cuts in order to spur the economy, there are many aspects which will  help franchisees. In particular, please note the following provisions contained in the tax bill:

  • An extension of individual tax rates, dividends, and capital gains for all taxpayers through 2012;
  • A reinstatement of the estate tax for 2011 and 2012 at a 35% rate with a $5 Million Exemption;
  • A reduction in the social security payroll tax for individuals from 6.2% to 4.2% for 2011 (note this does not apply to the employer share);  
  • A provision allowing businesses to fully expense capital investments through 2011;
  • An extension of the Alternative Minimum Tax (AMT) "patch" through 2011;
  • An extension of emergency unemployment benefits through 2011;
  • An extension of the 15-year depreciation schedule for new construction and improvements to restaurants;
  • An extension of the enhanced charitable deduction for contributions of food inventory through 2011;
  • An extension of energy tax incentives  - including those for ethanol;
  • An extension of the Work Opportunity Tax Credit (WOTC) through 2011.

To learn more about the tax cuts that have been extended, click here. To learn about other legislation that will affect your businesses, go to www.cfavotes.com.