With six months remaining in 2012, a sound recommendation would be to review expiring tax provisions (individual and business) and plan accordingly, to ensure you are prepared. Are there tax benefits today that you would like to take advantage of before the opportunity passes?
Every year the Joint Committee on Taxation produces a list of expiring tax provisions over the next ten years (https://www.jct.gov/). The most recent version was published January 6, 2012. According to this document, the number of expiring provisions, by year, is as follows –
|List of Expiring Federal Tax Provisions|
|Joint Committee on Taxation|
Now consider the proposed 2013 federal budget which extends, enhances and adds new tax provisions. Some of the business recommendations include: extending first-year depreciation deductions for certain property; granting a temporary income tax credit for job creation and wage increases; offering tax incentives for locating business activity in the US and prohibiting tax deductions for shipping jobs overseas; changing the Research & Experimentation credit; and, increasing the amount of deductible start-up expenditures.
Are there activities that you are considering implementing in 2012 that if you waited until 2013 would allow you to take advantage of proposed tax benefits?
How do you plan if you do not know for sure what will end and what will be enacted? You can expect that during the last four months of 2012, while the US is focused on the Presidential election, Congress will be considering approving a 2013 Federal Budget, which may include extending expiring tax provisions.
As recently as June 6, 2012, Bloomberg reported, “Former President Bill Clinton said Congress may have to temporarily extend all expiring tax cuts and spending into early 2013 to give lawmakers time to reach a deal on deficit reduction.” While extensions are common, the suggestion of extending “all” seems very aggressive, but plausible.© Copyright 2012 Regis Quirin, All rights Reserved. Written For: CFO Tips - What you need to know, to be a CFO TODAY!