The recent enactment of the Patient Protection and Affordable Care Act of 2010, in combination with the Health Care and Education Tax Credits Reconciliation Act of 2010 (collectively known as the “Health Care Act” or the “Act”), significantly changes the nation’s health care landscape, and many of these changes will be carried out through substantial additions and alterations to the U.S. tax code.

Given the scope of this landmark legislation, this short summary is by no means a comprehensive review of the new law. As your tax professionals at CB&H continue to study the legislation, we will continue to keep you informed and up-to-date regarding how the Health Care Act will affect you and your business.

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Last week, President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act (HR 2847). The law includes several major tax provisions designed to promote job creation as the nation’s economy continues to recover from recession.

The Act introduces the “Hire Now Tax Cut” to qualified employers both in the form of payroll forgiveness for Social Security taxes paid for qualified new hires, as well as a tax credit for keeping those employees on payroll for 52 consecutive weeks. Click here to read CB&H’s recent Tax Bulletin on the HIRE Act for more information about these provisions.

The Act also extends enhanced Code Sec. 179 expensing threshold levels through December 31, 2010. This extension means that the previous limits of $125,000 with a $500,000 cap will remain increased to $250,000 with an $800,000 cap through the end of the calendar year. Code Sec. 179 expensing, unlike bonus depreciation, is available on both new and used property.

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IRS Commissioner Shulman shocked most tax preparers and professionals last week at a New York State Bar Association Tax Section Meeting when he proposed that businesses should be required to provide detailed information in their tax returns regarding uncertain tax positions taken on their returns. Under the Commissioner’s proposal, taxpayers would be required to provide a “few sentences” of information explaining the nature of each uncertain tax position, and taxpayers who fail to disclose these “uncertain tax positions” would be subject to significant penalties.

If it sounds like the Commissioner is asking taxpayers to do the IRS’s job for them, you are at least partially right. The Commissioner is concerned that the IRS is spending too much time attempting to identify tax issues and believes that requiring the disclosure of uncertain positions will enable the IRS to resolve these issues much more quickly and efficiently than it is doing right now.

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As tax time approaches, businesses in the real estate and construction sectors will have to reconcile a challenging 2009. However, several pieces of legislation were signed into law over the course of the year that can provide some assistance, particularly to the residential construction industry. Before starting on your 2009 tax return, you should be aware of the following provisions.

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Beginning on January 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 50 cents per mile for business miles driven
• 16.5 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

These new rates are slightly lower than the 2009 rates, and reflect generally lower transportation costs compared to a year ago. The IRS bases these standard mileage rates on a study conducted each year by Runheimer International of the fixed and variable costs of operating an automobile.

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Changing tax accounting methods to accelerate deductions or defer income is an excellent way to postpone tax payments and enhance cash flow. For recurring items, the deferral effectively becomes a permanent benefit.

However, taxpayers must obtain IRS pre-approval to change a tax method of accounting by filing a Form 3115 application. To facilitate this process, the IRS will now provide automatic consent to over 140 specified changes.

In fact, a new IRS revenue procedure (Rev. Proc. 2009-39) just added seven additional methods of accounting to the automatic consent list, including deductions for repair and maintenance costs, and the accrual of real property taxes. Another benefit of filing a Form 3115 and obtaining IRS consent for a change in accounting method is IRS audit protection on that issue for prior years.

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As the end of the year approaches, now is the time to evaluate your business and your personal tax strategies. By taking the time to prepare now, using this checklist, you will be able to develop a clearer picture of what your tax picture will look like while there’s still time to maximize current-year savings.

Retirement Planning

Look to maximize tax-deductible retirement plan contributions. The following table provides the maximum amounts that can be deferred under several popular retirement plan options during 2009.

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Move Creates Unprecedented Combination of Tax Consulting and Compliance Resources for Businesses and Organizations in Local Market

Cherry, Bekaert & Holland, L.L.P. (CB&H), one of the 30 largest CPA and consulting firms in the U.S., is proud to announce the expansion of the Firm’s specialty tax leadership in the Washington practice. The move enhances CB&H’s ability to deliver high quality tax compliance and consulting services designed to help clients achieve their growth goals and objectives.

CB&H’s National Specialty Tax Practice stands as an alternative to national accounting firms, offering the resources and specialized tax talent found at the national CPA firms without the related service complexities and restrictions that are inherent in those organizations.

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The present volume of other real estate owned (OREO) and non-performing assets (NPA) presents an extraordinary challenge to lenders – and traditional solutions do not always apply. Foreclosure actions and online marketplaces often result in inadequate auction bids. Banks with OREO and NPA are often asking more than buyers are willing to pay. However, they often need to maintain their asking price in order to avoid realizing additional REO and loan losses and negatively affecting their overall capital. Attempts to sell the property can often result in additional costs to the bank from removing liens and other expenses.

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As reported today in The New York Times, the Swiss bank UBS has reached an unprecedented agreement with the U.S. Justice Department to disclose names and account details for over 4,450 wealthy American individuals suspected of income tax evasion. UBS will be notifying clients in the coming weeks.

Clients still have time to reveal themselves before a voluntary disclosure program ends Sept. 23 to potentially avoid prosecution and steeper penalties and fines….

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