TAX TSUNAMI #3 will destroy job creation for hundreds of thousands of business. The AMT (Alternative Minimum Tax) currently affects 4 million taxpayers who earn enough that they have to calculate their tax burdens twice and pay taxes at the higher level. This was established in 1969 to catch a handful of taxpayers. With the coming Tax Tsunami #3 this tax will increase the number of affected families to 28.5 million, and you could be one of them. This prediction comes from the Tax Policy Center, a left-leaning think tank.
Small businesses will no longer be able to expense business purchases in the year purchased. Right now businesses can expense (write off the entire cost) equipment rather than depreciate (slowly deduct) it over a period of years. This is a great tax break that allows businesses to use their dollars to hire people and expand their business. But not after January 1, 2011. What it means to a business is that their taxable income will go way up, thus causing them to pay more money to the government rather than retain those funds to HIRE PEOPLE AND CREATE JOBS.
There are hundreds of tax hikes on businesses that will take place on January 1.
There are also scores of changes in hundreds of other taxes and deductions, such as the following:
The deduction for tuition and fees will not be available.
Tax credits for education will be limited.
Teachers will no longer be able to deduct classroom expenses.
Coverdell Education Savings Accounts will be cut.
Employer-provided educational assistance is curtailed.
Student loan interest deduction will not be allowed for hundreds of thousands of families.
The Charitable Contribution from IRAs deduction will not be allowed. (Currently a retired person with an IRA can contribute up to $100,000 per year to a charity with no tax consequence).
This is just scratching the surface of the major tax increases rolling our way on January 1.
But Hold on to your Hats, Folks, there's more in the upcoming Tax Tsunami #4.
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