Tax Lawyer's Blog

There’s just one month left to do end of the year tax planning for the 2009 tax year so you’d better get on the stick.

The IRS website lists 35 tax changes for 2009. Here are 9 of the most significant of those changes:

1. 5-Year Carryback of 2008 Net Operating Losses (NOLs) for Eligible Small Businesses (ESBs) – For 2008 and 2009, you can choose a 3, 4, or 5-year carryback period for the part of your 2008 or 2009 NOL that is an ESB loss.
2. Business Start-up and Organizational Costs - A separate election statement is no longer required to elect to deduct up to $5,000 of business start-up and organizational costs paid or incurred after September 8, 2008.
3. Cancellation of Debt – Certain businesses can make an irrevocable election to delay recognition income from the cancellation of business debt arising from the reacquisition of certain types of business debt repurchased in 2009 or 2010.
4. Health Savings Accounts  (HSAs) -  For 2009, you can contribute up to the following amounts to a qualified individual’s HSA: $3,000 for self-only coverage or $5,950 for family verage. $4,000 for self-only coverage or $6,950 for family coverage for a qualified individual who is age 55 or older at any time during the year. The $6,950 limit is increased by $1,000 for two married individuals who are age 55 or older at any time during the year provided and each spouse has a separate HSA.
5. New Form to Adjust Employment Tax Returns – Beginning with errors discovered after 2008, employers must use form 941-X to adjust errors made on previously filed forms 941.
6. S Corporation Built-in Gains Tax - For tax years beginning in 2009 or 2010, no tax is imposed on the net recognized built-in gain of an S corporation after the 7th tax year in the recognition period.
7. Social Security and Medicare Taxes - The maximum amount of wages subject to the social security tax for 2009 is $106,800. There is no limit on the amount of wages subject to the Medicare tax.
8. Work Opportunity Credit – The credit has been expanded to cover unemployed military veterans and disconnected youth.

Related Posts:

• Reverse Tax Planning
• 5 Things You Can do Right Now to Save Taxes
• S Corporation Wages and Distributions: Basic Tax Planning

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