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Archive for the ‘tax deduction’ Category

It’s tax season and according to an article by MSNBC.com, small business owners could see some relief regarding their 2009 taxes. MSNBC.com spoke with Jean Baxley, a tax attorney in Washington, DC, about the latest tax breaks implemented by the Obama Administration under The American Recovery and Reinvestment Act of 2009 (ARRA).

Here are some of the breaks that the article mentions:

First year expensing:
Under the amended Sec. 179 deduction, small businesses can now expense up to $250,000 of the cost of their property and equipment that was put into use during 2009, all at once instead of using depreciation to find the cost of equipment and machinery purchases.

First-year bonus depreciation
The ARRA made “bonus” depreciation available on top of regular depreciation, so small businesses that were not profitable can now immediately depreciate 50 percent of the cost of any office-related property that they used in 2009.

General business credit
If small businesses are operating at a loss, then bonus depreciation is not going to be beneficial, so the Recovery act now allows businesses to claim a higher limit on their refundable credits instead if they want.

Read the article, “10 Tax Breaks You Need to Know About” to find out the other seven tax breaks and let NSSEA know your thoughts!

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The Teacher Tax Deduction is a provision in the tax code that allows elementary and secondary school teachers (including counselors, principals, and aides) the opportunity to take a tax deduction of up to $250 annually on their federal income tax, if they have spent their own out-of-pocket funds to purchase school supplies and/or equipment for their classrooms.

This federal tax law provision will expire on December 31, 2009 unless Congress extends, expands, modifies, strengthens or continues the Educator Expense Deduction for another year or longer.

Some top NSSEA priorities in advocating a Teacher Tax Deduction bill are to:

1. Create a “permanent” Teacher Tax Deduction that would not expire each year and would not have to be renewed annually.

2. Increase the dollar value of the Educator Expense Deduction from $250 to a larger amount. Most bills that propose this change would double the deduction from $250 to $500 per eligible educator, per year.

3. Expand the definition of an “eligible educator,” one who is eligible for the Teacher Tax Deduction, to include Head Start teachers and early childhood educators.

Each of these proposed types of changes will add to the cost of the current Educator Expense Deduction meaning that Congress will have to determine what these additional costs would be, and to calculate how they would be paid for. These are difficult choices, given the rising national debt and federal deficit of the nation. Congress would have to consider which changes are the most important to make, if any, and how affordable it would be to make them.

In recent years, Congress has chosen to pass a large package of federal tax bills set to expire, by bundling them together into a single piece of legislation, known as a “tax extenders” bill, and passing the package before the expiration date, at the end of the calendar year. However, in other years, Congress has not acted until after the group of tax provisions officially has expired. Then Congress included legislative language to make continuation of the federal tax provisions retroactive to the first of the relevant calendar year, so the Teacher Tax Deduction remains available for eligible teachers to use.

To contact your legislator, visit: http://www.usa.gov/Contact/Elected.shtml and show your support for the Teacher Tax Deduction Bill. Let NSSEA know your thoughts!

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