The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 was passed by Congress in late December 2010. It makes many changes. A couple of the new temporary provisions are intended to help improve the economy and create jobs.
Business owners that buy used equipment and place it in use in 2011 and 2012 can get an income tax deduction for up to $500,000 each year.
Business owners that buy new equipment and place it in use in 2011 and 2012 can get an income tax deduction for 100 percent of the cost of the items. This applies to all businesses of all sizes.
We don't know what the laws on these items will be in 2013 and later. However these provisions may create jobs to build, sell and use the equipment. We sure hope so!
If the economy gets better and solves part of the unemployment problem, maybe everyone will be better off. Who knows, maybe seniors and others can earn a little more interest on their hard-earned savings?
On the other hand ... the tax credit for energy-saving improvements is reduced in 2011.
It was up to $1,500 of tax credit (like income tax withheld) for getting new furnaces, water heaters, windows and doors, etc. Now Congress has said any credits you claimed in 2009 or 2010 will count against the energy tax credit. And, the previous limit of $1,500 falls down to only $500. And, there are caps on how much credit can be claimed for various items like only $200 credit for windows.
I don't understand why we even use the income tax code to try to move people to take particular actions. But when Congress keeps changing the rules all the time, it seems counterproductive to me.
We are still learning about the details of the new tax law. Many 2010 returns will be similar to 2009 for most deductions. It sure took a long time to get passed.
Did you hear "Going to church doesn't make you a Christian any more than standing in a garage makes you a car"?
• John Bullis is a certified public accountant, personal financial specialist and certified senior advisor serving Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs, LLC.