Many Business Tax Breaks Expired at the End of 2009

Although there is some talk of extension, unless Congress acts to retroactively restore them, the following business tax breaks that expired on December 31, 2009 will not be available in 2010:

• The additional first-year 50% bonus depreciation for qualified property, generally equipment, machinery, electronics, etc.

• The $8,000 increase in the first-year depreciation limit for passenger automobiles used in business

• The Sec 179 expense deduction for 2010 is substantially reduced. The maximum amount that may be expensed is $134,000 (down from $250,000 for 2009). The maximum annual expensing amount generally is reduced dollar-for-dollar by the amount of property placed in service during the tax year in excess of $530,000 (down from $800,000 in 2009).

• The five-year depreciation for farming business machinery and equipment

• The fifteen-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements

• The credit for construction of new energy-efficient homes (this provided a credit up to $2,000 for site-built homes and $1,000 to $2,000 for manufactured homes)

• The enhanced (greater than cost) charitable deduction for contributions of food inventory by a non-corporate taxpayer from its trade or business of apparently wholesome food inventory for the care of the ill, needy, or infants

• The enhanced charitable deduction for contributions of book inventories to public schools

• The enhanced deduction for corporate contributions of computer equipment for educational purposes

• The seven-year straight-line cost recovery period for property used for land improvement and support facilities at motorsports entertainment complexes

• The film and television producers’ election to expense the first $15 million of production costs incurred in the U.S. ($20 million if the costs are incurred in economically depressed areas in the U.S.)

• The credit for eligible small business employers equal to 20% of the sum of differential wage payments to activated military reservists

If you have questions relating to any of the above, please give this office a call.

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