Tax Changes: Tax Breaks Comes At A Cost

The Small Business Jobs Act of 2010 has created new tax breaks, but at a cost.

New tax break for long-term contract accounting. The Small Business Jobs Act provides that in determining the percentage of completion under the percentage of completion method of accounting, bonus depreciation in 2010 is not taken into account as a cost. This prevents the bonus depreciation from having the effect of accelerating income. ( This information provided by: © 2010 Thomson Reuters/RIA. All rights reserved.)

Revenue raisers. These tax breaks come at a cost. To mention a few of these unfavorable provisions, information reporting will generally be required for rental property expense payments made after Dec. 31, 2010, and increased information return penalties will be imposed. ( This information provided by: © 2010 Thomson Reuters/RIA. All rights reserved.)

Contact your CPA if you have questions about these new accounting practices.