alternative minimum tax - The S Corporation Association

President Signs Tax Bill

Before a South Lawn crowd today, President Bush signed into law H.R. 4297, the “Tax Increase Prevention and Reconciliation Act of 2005″. Cumbersome name aside, the bill is a relatively streamlined effort to extend several expiring tax provisions, including the lower tax rates on capital gains and dividends, and middle-class protection from the Alternative Minimum Tax.

S-CORP’s focus now turns to the second tax bill, known in tax circles as the “trailer package”, and the open question of which of the provisions excluded from the first bill will make it into the second (“trailer trash”). S-CORP continues to work with friends …

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admin2019-02-06T18:47:19+00:00May 17, 2006|

House Approves $70 Billion Tax Cut Bill

Yesterday, by a vote of 244-185, the House approved the long-delayed tax reconciliation bill (H.R. 4297) following an agreement between House Ways and Means Committee Chairman Bill Thomas (R-CA) and Senate Finance Committee Chairman Chuck Grassley (R-IA) that a follow-up tax extenders bill may be attached to pension reform legislation.

The reconciliation tax bill includes a two-year extension of the reduced tax rate on capital gains and dividends, a one-year extension of alternative minimum tax relief for middle-income tax payer, a two-year extension of increased small-business expensing under section 179, and extension of the subpart F exemption for active financing income.

Fourteen …

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admin2019-02-06T18:47:20+00:00May 11, 2006|

No Agreement on H.R. 4297

House and Senate tax writers failed to reach an agreement this week on a final tax reconciliation conference report (H.R. 4297), despite earlier predictions that a final bill would be unveiled this week. It appears that the final bill will include both the AMT relief the Senate wants and the extension of the lower rates on investment income the House wants, as well as provisions necessary to cover the out-year revenue losses of the lower rates. According to Senate Finance Committee Chairman Grassley, these items add up to $74 billion over five years, $4 billion more than the budget limit. …

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admin2019-02-06T18:47:20+00:00April 28, 2006|

New Congressional Budget Doesn’t Protect Tax Relief

There are two ways to pass a tax bill in the Senate: bring it up under the regular floor rules and gain the support of 60 Senators, or bring it up under the “budget reconciliation” process and attain the support of a simple majority. The budget offered by Senate Budget Chair Judd Gregg last week assumes $227 billion in lower taxes over the next five years, but doesn’t protect that tax relief under reconciliation.

What does that mean for S-CORP members?

It means that any tax bill brought to the Senate floor that conforms to the budget resolution would still …

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admin2019-02-06T18:47:20+00:00March 14, 2006|

The President’s Budget

One of the challenges of political advocacy is to separate real from imagined threats. For S Corps, the threat of increasing payroll taxes on S Corp profits continues to be very real indeed, despite the best efforts of a broad coalition of business groups to educate policy makers on why the proposals on the table are bad policy and bad economics. For example, the attached BNA story is about a relatively narrow proposal in the President’s new budget to increase collections of payroll taxes from companies that lease employees to other businesses.

At first blush, it’s not really about S Corps. …

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admin2019-02-06T18:48:17+00:00February 10, 2006|