Fifty Percent Bonus Depreciation is extended for expenditures made in 2009 and for certain longer-lived assets in 2010.

Section 168(k)(4) Election to Accelerate AMT or R&D Credits is extended. Last year's stimulus legislation allowed businesses to elect to accelerate the recognition of AMT credits or R&D credits in lieu of bonus depreciation. This election is now extended until January 1, 2009. The amount that may be accelerated is based on the amount that each taxpayer invests in property that would otherwise qualify for bonus depreciation. The amount is capped at the lesser of 6% of historic AMT and R&D credits or $30 million.

Small Business Expensing Rules are extended. In the 2008 stimulus legislation, Congress increased the expensing provisions for small businesses to $250,000 for assets purchased in 2008, and phased out the limitation for businesses that purchased more than $800,000 in assets. This rule is extended for 2009.

NOLs the Carryback Period Extended to Five Years (instead of two) for businesses with $15 million or less in revenues beginning with 2008 NOLs.  Carryback elections made previously can be changed but only once and must be made on a timely basis.

The Worker, Homeownership, and Business Assistance Act of 2009 allows a taxpayer election to extend to five years the carryback period for net operating losses (NOL) incurred in 2008 or 2009.  Limits the amount of a NOL carried back to the fifth taxable year to 50% of taxable income, except for small business taxpayers with gross receipts of $15 million or less.

Temporary Estimated Tax Relief for Small Businesses is granted. For a tax year that begins in 2009, if an individual has adjusted gross income below $500,000 and more than 50% of that income comes from a small business, the individual will not incur a penalty for underestimating taxes if the payments made are equal to at least 90% of the tax liability for the year. For this provision a small business is defined as a business with fewer than 500 employees.

Small Business Stock Capital Gains—an individual who invests in the stock of a small business and holds that investment for at least five years may exclude up to 75% of the gain realized on the disposition of that stock, provided certain requirements are met. This provision is effective for investments made after the date of enactment and before January 1, 2011. For this purpose, a small business is defined as a corporation with less than $50 million in gross assets.

Holding Period to Avoid S Corporation Built-in Gains Tax is temporarily reduced from ten to seven years. Prior to enactment of the new legislation, a C corporation converting to S corporation status had to hold assets for at least ten years to avoid tax on any built in gains in the assets. The legislation reduces the threshold to seven years, but only for sales occurring in 2009 and 2010.

The Enhanced Work Opportunity Credit Expanded—the categories of out-of-work individuals for which an employer can obtain the Work Opportunity Credit now includes, unemployed veterans and disconnected youth. There are specific eligibility criteria for each. This credit is available for 2009 and 2010, and for any employee who started work after December 31, 2008.

Delayed Recognition of Certain Cancellation of Debt Income—under current law, a taxpayer generally has income where the taxpayer cancels or repurchases its debt for an amount less than its adjusted issue price. The amount of cancellation of debt income ("CODI") is the excess of the old debt's adjusted issue price over the repurchase price. Certain businesses will be allowed to recognize CODI over 10 years (defer tax on CODI for the first four or five years and recognize this income ratably over the following five taxable years) for specified types of business debt repurchased by the business after December 31, 2008 and before January 1, 2011.

Other Business Provisions from the Worker, Homeownership, and Business Assistance Act of 2009 including:

Increased S-Corporation and Partnership Penalties – Partnerships or S corporations  that fail to file a required return will be assessed a penalty of $195 per partner or per shareholder for each month, or fraction of a month the failure continues, up to a maximum of 12 months.

Effective for returns filed for tax years beginning after December 31, 2009.

Federal Unemployment Tax - The temporary FUTA surtax of 0.2 (total of 6.2%) percent on wages is extended through June 30, 2011. The rate will drop to 6.0% for wages paid after June 30, 2011.

Effective for wages paid after December 31, 2009.

Corporate Estimated Tax Payments - The estimated tax payment required to be made in July, August, or September 2014, by a corporation with at least $1 billion in assets is increased to 133.25% of the amount otherwise due.

If you're interested on seeing more details of these acts, please visit www.recovery.gov www.irs.gov, or www.govtrack.us

Additional Tax Planning for Individual Retirement:

If you have a traditional IRA, consider whether you might benefit from converting it to a Roth IRA. You must generally pay tax on the conversion in the year of the conversion, but you can enjoy tax-free distributions in the future.  You can make the conversion only if your 2009 AGI is $100,000 or less.  However, this limit is scheduled to be eliminated beginning in 2010.  So if your AGI is too high in 2009, start thinking about whether you should convert in 2010 instead.

In addition, for Roth conversions made in 2010, the income can be deferred in equal installments to 2011 and 2012.  Thus, you can defer the tax on that income as well.

Note: Resources are referenced from the website of IRS, AICPA, THOMAS and NATP

The Making Work Pay Credit will provide up to a $400 tax credit for singles or $800 for married filing jointly. The credit is 6.2% of earned income and phases out at AGI of $75,000 for singles or $150,000 for married filing jointly. Taxpayers will not receive a check like they did for last year's stimulus payment—this year's credit will be received through a reduction in employee withholding and self-employed required estimated tax payments. The IRS will send withholding tables and information to taxpayers.

Economic Recovery Payments of $250 will be sent to recipients of Social Security, SSI, Railroad Retirement and Veterans Disability Compensation Benefits, but for those who work it will be offset by any Make Work Pay Credit.

Federal and State Pensioners will receive a one time refundable tax credit for those not eligible for Social Security Benefits. It is also reduced to the extent of any allowable Making Work Pay Credit.

First-time Homebuyer Credit – First-time homebuyers who purchase a home between April 8, 2008, and Dec. 1, 2009, can receive a refundable tax credit equal to 10% of purchase price, up to $8,000 . Phase-out of this credit starts at $75,000 for individuals and $150,000 if Married Filing Jointly. Those making $95,000 or $170,000, respectively, or more are not eligible to receive this credit. When you file your 2008 or 2009 tax returns, make sure you claim the maximum benefit under this provision. Individuals who purchased a home in 2009 and already filed a 2008 return claiming a $7,500 credit based on the prior law should amend their return to claim the balance of the credit (up to $500).

Time Extended for First-time Homebuyers (Updated) – New legislation, the Worker, Homeownership and Business Assistance Act of 2009, which was signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts. The new law:

• Extends deadlines for purchasing and closing on a home.
• Authorizes the credit for long-time homeowners buying a replacement principal residence.
• Raises the income limitations for homeowners claiming the credit.

Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.

For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.

People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after Nov. 6, 2009. The credit phases out apply to both first-time homebuyers and long-time homeowners.  The phase-out ranges are adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers.

Several new restrictions apply to homes purchased after Nov. 6, 2009.

• Purchasers must attach a properly executed settlement statement to their return.
• No credit is available if the purchase price of the home exceeds $800,000.
• The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.
• A dependent is not eligible for the credit.
• The new law gives the IRS broader authority to deny first-time homebuyer credit claims, without having to first audit a taxpayer's return. Known as math error authority, this authority applies, retroactively, to credits claimed on original and amended 2008 returns, as well as to claims yet to be filed.

Sales Tax on Vehicle Purchases is deductible towards AGI. For 2009, this legislation allows all taxpayers a deduction for state, local, and excise taxes paid on the purchase of a new car or light truck. The deduction phases out at AGI levels of $125,000 for singles or $250,000 for married filing jointly.

Alternative Minimum Tax Relief is extended for 2009. The legislation increases the AMT exemptions for 2009 to $46,700 for individuals and $70,950 for joint filers.

Also, beginning in 2009 an individual may offset the entire Regular Tax Liability and Alternative Minimum Tax Liability by the nonrefundable personal credits.

The American Opportunity Education Tax Credit replaces and improves upon the HOPE scholarship credit. The American Opportunity Credit is allowed for up to four years of undergraduate education, and for 2009 and 2010 the maximum credit will be $2,500 in each year and 40% of the credit is refundable. The credit phases out at AGI levels between $80,000 and $90,000 for singles and $160,000 and $180,000 for married filing jointly.

A Student Computer Purchase may be treated as a qualified education expense for Section 529 plans in 2009 and 2010. This includes software and peripheral equipment.

The Earned Income Tax Credit will increase be available for many low-income families in 2009 and 2010. For families with three or more children, the credit is 45% of the family's first $12,570 of earned income, and the credit phase-out begins $1,880 higher at $21,420.

Child Tax Credit Refundability will increase in 2009 and 2010. In 2008 the child tax credit was refundable to the extent of 15% of the taxpayer's earned income in excess of $8,500. The legislation reduces this to $3,000 for 2009 and 2010.

COBRA Premium Assistance for the Unemployed—the federal government will subsidize 65 percent of COBRA premiums for employees who are involuntary terminated between September 1, 2008, and December 31, 2009. The new provisions will become effective March 1, 2009; however, an involuntary termination is not specifically defined.

The subsidy phases out between $125,000 and $145,000 for singles and between $250,000 and $290,000 for married filing jointly. Plan sponsors (including union trust funds and for-profit, tax-exempt, church and governmental employers) will be responsible for quickly administering the new provisions and will need to work closely with their COBRA administrators to ensure compliance.

Unemployment Compensation – Those receiving unemployment compensation will not be taxed on the first $2,400 of unemployment benefits. Unemployment compensation is increased by an additional $25 per week and the time to receive benefits is extended. When filing your 2009 tax return, make sure you reduce reported unemployment benefits by $2,400 (but not below $0). Check with your local unemployment office regarding availability of these benefits.

Health Coverage Tax Credit—effective May 1, 2009, the health coverage tax credit is increased from 65 to 80 percent of the individual's premiums for qualified health insurance of specific family members. The increased credit expires in 2011.

Executive Pay Restrictions—the Act further restricts executive pay from those financial institutions accepting Troubled Asset Relief Program (TARP) funds and provides more checks and balances regarding executive compensation