This page summarizes important changes in tax.  It is constantly being updated with the newest laws and regulations so check back often for updates!  Also check out our Quick Reference page for commonly used rates and limits.

Hot off the presses:

On December 23, after a grinding, down-to-the-wire battle, Congress passed the “Temporary Payroll Tax Cut Continuation Act of 2011”. The bill was signed into law by President Obama shortly thereafter. The tax provisions consist of a two-month temporary extension of the payroll tax cut that's in place for 2011, plus a parallel extension of a lower Self Employment tax rate.  This cuts the employee's portion of Social Security by 2%.  This has been in effect through 2011 and will now continue through February 2012. A House-Senate Conference will convene soon to consider extending the temporary payroll tax cut for the remainder of 2012.

If you are planning on buying some new equipment for your business, here's a quick rundown of the latest incentives in depreciation. 

Bonus depreciation is available for federal purposes (the state of Idaho did not implement this portion of federal law). Bonus depreciation is available for NEW equipment (not used equipment).  You can use bonus depreciation to write off 100% of equipment purchases in 2011 and 50% of purchases in 2012.

Another method of writing off new and used equipment is called a Section 179 election. This is available for both Federal and Idaho purposes. The amount of write off available using this method is $500,000 in 2011 and $125,000 in 2012.

These methodologies are not mutually exclusive so you can use a blend of both in the same year.

As you can see, under some circumstances, the tax law is more beneficial in 2011 than it is in 2012.  If you are planning on purchasing some new equipment in the next couple of years, you'll benefit from doing it during 2011.  Note that these methodologies only affect the timing of the write off. In all cases, the entire amount of the purchase is eventually written off.

The “Idaho Hire One Act” gives a refundable tax credit to Idaho employers who hire new workers before March 31, 2013. The credit is up to 6% of the wages of the new employees. Employees must make a set wage ($12-$15 and hour) and receive medical insurance benefits.
 
The Employer can apply for the credit on their tax return after the employee has worked for 9 consecutive months.  “New” Employees are determined by the comparison of the employee counts for the current year to the previous year (or the average of 2 years.)

Tax Relief Act creates a 100% write-off for heavy SUVs used entirely for business

Although it may be an unintended result of the 2010 Tax Relief Act, the limited-time 100% bonus depreciation allowance for qualified property under Code Sec. 168(k) allows taxpayers that buy a new heavy (Gross Vehicle Weight of over 6,000 lbs) SUV used entirely for business to write off the entire purchase price in the placed-in-service year.

So, a taxpayer that buys and places in service a new heavy SUV after Sept. 8, 2010 and before Jan. 1, 2012, and uses it 100% for business, may write off its entire cost in the placed-in-service year. There is no specific rule barring this result for heavy SUVs.