HEALTH CARE ACT:
Most people are aware that two legislative bills, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, were passed in 2010. But, many taxpayers don’t know how they will be affected by the provisions in these bills. A few of the provisions became effective for 2010, including a tax credit for certain health care premiums paid by small business employers, an increased adoption credit and a new tanning excise tax.

Call for an appointment—there is still time to consider these provisions in year-end tax planning. For provisions that begin in 2011, watch for updates coming in the next few weeks.

INVESTMENT ISSUES

Beginning in 2011, the form 1099-B will be expanded to include the cost or other basis of stock or mutual funds sold or exchanged during the year. Dates will be included as well, so the categorization of short term or long term gain will be clear.

Why does this matter for investors? Since this information is needed to prepare the tax return, much time has been spent manually entering transaction information. With the advent of the expanded form, the information will already be there, saving data entry time. Brokerages will need to start producing information in a way that will save accountants a whole lot of time and effort!

TAX CHANGES

With elections coming soon, we expect Congress to determine whether to let the "Bush-era" tax cuts expire to help pay down the deficit, or to keep some of the cuts to further stimulate the economy. No small task!

Even if Congress extends the top income tax bracket of 35%, many, many taxpayers could see their tax bills go up by several hundreds to thousands of dollars if Congress does not also address the alternative minimum tax.

Stay tuned to our for more tax updates, or contact us with specific questions.

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