Tax law changes will impact 2008 returns

| Print |  Email
Sunday, February 01, 2009

The taxman cometh in just a few short months, and though you probably won’t have to declare the pennies on your eyes, as George Harrison once advised, several key changes in tax laws are definitely worth knowing about in advance of April 15.


“There were so many tax acts this past year, so education is a big part of what we’ll be doing with our clients,” says Daniel Monaghan Jr., senior tax manager at the Portland accounting firm Perkins & Co.

Two major federal laws, the Economic Stimulus Act of 2008 and the Emergency Economic Stabilization Act, each came with several tax provisions that will impact 2008 returns.

The first increased the Section 179 deduction for new equipment put into service in 2008 from $125,000 to $250,000. The cap on equipment spending covered by the deduction was also raised for 2008 from $500,000 to $800,000.

Monaghan notes that businesses that don’t qualify for the Section 179 deduction are eligible for a 2008-only bonus depreciation, through which they can write off 50% of the cost of equipment and then depreciate the other 50%.

The second new law, aka “the bailout,” extended several business tax provisions that were set to expire. Among them, the depreciation timeline for qualified leasehold improvements made by, for instance, a tenant renting office space.

In the past, those improvements have been depreciated over 39 years, but that was temporarily changed for 2007 — and now extended through 2009 — to 15 years.

In addition, the bailout made changes that are in effect for the 2009 tax year, including extending a research and development tax credit and allowing employers to provide up to $240 to employees who commute by bike. It also eliminated restrictions so that more businesses can qualify for a 30% tax credit on solar power installations; in Oregon, businesses are also eligible for a credit of up to 50% of the cost of a solar project over five years.

This year also will bring a tax break to Portland businesses in the form of a reconfigured business license tax, which will now be paid at the end of each year instead of in advance.

As for what else 2009 — and the new Obama administration — may bring in terms of taxes, Monaghan says the new president’s campaign was heavy on tax reform, but until anything becomes law, there’s little point in speculating.

“We don’t trust anything until the president signs it,” he says.

JON BELL




Have an opinion? E-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it
 

More Articles

Business partnerships: taming the three-headed monster

Contributed Blogs
Monday, July 06, 2015
070615-businessmarriagefail-thumbBY KATHERINE HEEKIN | OB GUEST COLUMNIST

Picking a business partner is not much different than choosing a spouse or life partner, and the business break-up can be as heart-wrenching and costly as divorce.


Read more...

Oregon needs a Grand Bargain energy plan

Linda Baker
Monday, June 22, 2015
0622-gastaxblogthumbBY LINDA BAKER

The Clean Fuels/gas tax trade off will go down in history as another disjointed, on-again off-again approach to city and state lawmaking.


Read more...

5 things to know about veterans in the workforce

The Latest
Wednesday, July 01, 2015
070215-vetsthumbBY JACOB PALMER | DIGITAL NEWS EDITOR

There are more than 10 million former military members working in the United States.


Read more...

House of Clarity

July/August 2015
Monday, July 13, 2015
BY JACOB PALMER

Holding a Power Lunch at Veritable Quandary in downtown Portland.


Read more...

Reader Input: Road Work

March 2015
Wednesday, July 15, 2015

Oregon's roads are crumbling, and revenues from state and local gas taxes are not sufficient to pay for improvements. We asked readers if the private sector should help fund transportation maintenance and repairs. Research partner CFM Strategic Communications conducted the poll of 366 readers in February.

0315 input01 620px

 

Reader comments:

"I feel private enterprises are capable of operating at a higher efficiency than state government."

"This has been used in Oregon since the mid-1800s. It is not a new financing method. This form of financing may help Oregon close its infrastructure deficit by leveraging funds."


Read more...

The Private 150: From Strength to Strength

July/August 2015
Monday, July 13, 2015
BY KIM MOORE

Revenues in Oregon's private, for profit sector maintained solid growth as the economy continued to rebound.


Read more...

The 5 highest revenue-generating parks in Oregon

The Latest
Thursday, June 11, 2015
parksthumbBY JACOB PALMER | DIGITAL NEWS EDITOR

In 2014, total revenue for camping and day use in Oregon State Parks was a little more than $17 million. That figure may even higher this year "because we've had exceptionally nice weather," Hughes says.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS