September 15 – Payroll tax deposits due for monthly depositors

September 15 – Third quarter estimated tax deposits due for individuals and C Corporations

September 15 – Extended 2009 income tax returns due for Estates, Partnerships, S Corporations and C Corporations

September 20 – Texas Sales and Use Tax Return due for monthly filers

July 15 – Payroll tax deposits due for monthly depositors

July 20 – Texas Sales and Use Tax Return due for monthly and quarterly filers

Section 179 is the IRS code that allows a business to expense in the year purchased–rather than having to capitalize and depreciate over several years–most equipment  it purchases.  For example, if you buy $100,000 of equipment in 2010, you can deduct the full purchase price against income earned this year.

The maximum section 179 expense deduction you can elect for qualified section 179 property you placed in service in tax years that begin in 2009 remains at $250,000 ($285,000 for qualified enterprise zone property and qualified renewal community property). This limit is reduced by the amount by which the cost of section 179 property placed in service in the tax year exceeds $800,000

Depreciation limits on business vehicles. The total depreciation deduction (including the section 179 expense deduction) you can take for a passenger automobile (that is not a truck or a van) you use in your business and first placed in service in 2009 is $2,960 ($10,960 for automobiles for which the special depreciation allowance applies). The maximum deduction you can take for a truck or van you use in your business and first placed in service in 2009 is $3,060 ($11,060 for trucks or vans for which the special depreciation allowance applies).

Caution. These limits are reduced if the business use of the vehicle is less than 100%.

Most tax-exempt organizations, other than churches, must file a yearly return or notice with the IRS. If an organization does not file as required for three consecutive years, the law provides that it automatically loses its tax-exempt status. Loss of exempt status means an organization must file income tax returns and pay income tax, and its contributors will not be able to deduct their donations.

What must be filed this year depends on the organization’s financial activity:

Whew!  April 15th has come and gone, but here’s what due this month:

May 17 – Payroll tax deposits due for monthly depositors

May 17 – Texas Franchise Tax Reports and Texas Public Information Reports due for Texas corporations and LLC’s

May 20 – Texas Sales and Use Tax Return due for monthly filers

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD), designed to protect consumers from unfair credit practices, generally took effect on February 22, 2010. Here’s a summary of several key provisions.

• Introductory rates offered by credit card companies must remain in effect for at least one year (six months for promotional offers). Consumers must receive at least 45 days’ notice (instead of the previous 15 days) before a rate hike. (This provision became effective August 20, 2009.)
• Companies will be required to mail credit card statements at least 21 days before the due date (seven days longer than before).
• Issuers can’t raise rates on an existing balance unless you’re late by 60 days or more.
• Credit card payments will be applied to debt with the highest interest first. Previously, companies did the opposite.
• Double-billing cycles, the practice of basing finance charges on both the current and previous balance, are banned.
• To reduce “over-the-limit” fees, companies must obtain a cardholder’s permission to process transactions above their personal limit.
• Consumers must be notified how long it will take and how much it will cost to eliminate debt through minimum monthly payments.
• Applicants under age 21 won’t qualify for a credit card without showing an ability to pay or a co-signer.
• Statements must prominently display fees paid to-date as well as explanations for those fees.

The IRS is required to adjust many tax numbers for inflation each year. Because there was little inflation last year, there’s very little change in 2010 numbers. Here are the numbers you’ll need for your 2010 planning.

• The maximum earnings subject to social security tax remains at $106,800. The earnings limit for those under full retirement age is $14,160. For those at full retirement age, there is no earnings limit.
• The maximum individual retirement account (IRA) contribution you can make in 2010 remains unchanged at $5,000 if you’re under age 50 and at $6,000 if you are 50 or older.
• The maximum amount of wages employees can put into a 401(k) plan remains at $16,500. The 2010 maximum allowed for SIMPLE plans is $11,500. If you are 50 or older, you can contribute up to $22,000 to a 401(k) and $14,000 to a SIMPLE plan.

For details or for assistance as you begin your 2010 tax planning, give our office a call.

The federal tax provision for the motion picture and TV industry, called Section 181, is set to expire January 1, 2010.  This incentive allows a production company to deduct up to $15 million in costs of any qualifying film or television production instead of having to capitalize and depreciate such costs over several years.  This can be a major incentive for investors to put money in your project.  However, the deadline was extended once already, and barring any last-minute tax maneuvers, if you don’t start principal photography by January 1, 2010, you’ll have to account for the expenses under the old depreciation rules.

In 2004, Congress gave filmmakers a wonderful gift in the form a tax break which allows the owners of a qualified film or television production to deduct production costs in the year the costs were incurred, rather than capitalizing and recovering such costs over time through depreciation.  This is a substantial incentive for investors because they can more quickly recognize tax benefits from their investment in your film or television production.  There’s no minimum to spend, and the maximum is $15 million ($20 million for shooting in a “historically underused” area of the country). Substantial portions of the expenses must be spent within the United States.

If you’re a filmmaker approaching investors about your project, this is a wonderful incentive to remind them about.  But time is of the essence because the change in regulations, officially known as Section 181, is only temporary.  In order to qualify, principal photography, or in-between animation in the case of an animated production, must begin before January 1, 2010.  Although there’s plenty of discussion about extending this provision again (it originally expired January 1, 2009) there are no firm measures in place yet to do so.

The application fee will increase for all applications to the IRS for tax-exempt status postmarked after January 3, 2010.  Charitable, religious, educational, scientific, or literary organizations whose gross annual receipts are $10,000 or less will see their fees increase to $400.  Larger organizations will pay $850.

In Kafka-esque fashion, the fees will change a second time in 2010.  Once a web-based software called Cyber Assistant is available, fees for all organizations regardless of size will decrease to $200 as long as applications are filed on-line.  No word yet on when the web application will be active.