How will the Bush tax cuts expiring effect you?
What happens when the Bush tax cuts expire?
If congress does not act to extend the Bush Tax Cuts, many of us will be affected by this event. Businesses will be especially hit.
The special expensing deduction limit will decrease by 75%, and 100% bonus depreciation will expire. Many businesses will have to depreciate more items, creating less profit and more bookkeeping and tax preparation expenses. Leasehold improvements will be limited in how much can be deducted each year as well.
The Energy Efficient Home Credit will hit builders hard, losing about $2,000 per each home that qualifies. I expect this cost will be passed on to consumers.
The death tax limit will decrease 5 fold, making relatively modest estates pay death taxes and the highest rate will go up to 55%. This is taxes on top of property that was already subject to income tax. Tax and tax again!
Bottom line if government doesn’t come to an agreement all taxpayers will be effected.
Income Tax Preparation Specialist