3746 Clemmons Road,
PO Box 1396 Clemmons, NC 27012

Phone: 336-766-6811
Fax: 336-766-6809

Disclaimer

Please note that tax laws change almost daily and that each situation is unique and although we strive to provide current information, none of the information found on these pages can replace the advise of a tax professional. We strongly recommend you consult with a tax professional about your individual situation to ensure proper application of tax laws. We are not responsible for the use of these links as your only source of tax information.

Highlights Of The Small Business And Work Opportunity
Tax Act Of 2007

On May 25, 2007, President Bush signed H.R. 2206 into law. This Iraq supplemental spending measure includes a minimum wage increase and a tax title (Title VIII B) called the "Small Business and Work Opportunity Tax Act of 2007." The small business tax incentives in this tax title ((referred to in this publication as "the 2007 Small Business Act") include general provisions affecting small businesses across-the-board, Gulf Opportunity Zone tax incentives and some favorable changes to the rules governing S corporations. However, the 2007 Small Business Act also includes a number of revenue raisers such as new and enhanced penalties and broadening of the kiddie tax, among other items.

Among the general business incentives covered in this bill are:

... enhanced and extended expensing;

... multiple improvements to the FICA tip credit and the work opportunity tax credit; and

... a new choice for joint ventures conducted by spouses.

S corporation changes covered in this Tax Planning & Practice Guide include:

... a new opportunity for electing small business trusts to deduct interest on debt used to acquire S stock;

... eased rules for Q-Subs that lose their qualification as such;

... elimination of passive income treatment from gains on sales of stock and securities

Gulf Opportunity Zone relief covered in this Tax Planning & Practice Guide includes:

... enhanced and extended expensing for property used in highly damaged GO Zone areas;

... eased tax-exempt qualified mortgage bond treatment for rehabilitating GO Zone residences; and

... eased low-income housing credit rules for buildings in the GO Zones.

In a surprise development, several pension-related technical corrections were included in H.R. 2206. These technical corrections are highly specialized and are not described in this article.