On December 13th, 2011 the house passed H.R. 3630, the “Middle Class Tax Relief & Job Creation Act of 2011. If the Middle Class Tax Relief & Job Creation Act of 2011does become law what real world implications would have?
First, maybe you noticed that at the beginning of 2011 you started taking home more in your paycheck. That is because there was a 2% reduction in workers payroll taxes and self-employment tax. So employees have been saving 2% of FICA taxes all thru 2011; H.R. 3630 extends that 2% reduction for 2012.
Also, 100% bonus depreciation “for most assets” is set to expire at the end 2011. Under current law, business taxpayers must generally depreciate the cost of capital assets over several years, with the exact period depending on the asset. Under legislation enacted in late 2010, qualifying property purchased (and placed into service) after September 8, 2010 and before January 1, 2012, is eligible as “100-percent bonus depreciation under which the cost of the property is immediately deductible that year. If H.R. 3630 is not passed, the tax benefit is set to expire. For small business owners, this means you can “expense” a new equipment all in one year.
Now it isn’t certain the Middle Class tax Relief & Job Creation act of 2011 will become law. We should know in the next few weeks. We will update any changes as they become available.
If you would like to read more, visit our website