Congress finally passed, and the president signed, small business tax reforms after months of political fracas over other parts of the legislation. But don’t be misled by the low profile given this new tax legislation.
Advice: The new law opens up tax-saving opportunities for savvy entrepreneurs, but it also includes some dangerous pitfalls. One onerous provision in the law could adversely affect millions of taxpayers.
Here are some of the key changes in the new “small biz” tax law, the Small Business and Work Opportunity Tax Act of 2007.
New tax-saving opportunities
- The maximum amount that a business can “expense” (i.e., currently deduct) this year increases to $125,000 with enhancements through 2010. (Previously, the maximum was set at $112,000 for the 2007 tax year.) Also, the phaseout threshold for 2007 increases from $450,000 to $500,000. :
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