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2010 Tax Breaks & Incentives

Enhanced small business expensing (Section 179 expensing)
In order to help small businesses quickly recover the cost of certain capital expenses, small business taxpayers can elect to write off the cost of these expenses in the year of acquisition in lieu of recovering these costs over time through depreciation.  Under pre-2010 Small Business Jobs Act law, taxpayers could expense up to $250,000 of qualifying property -- generally machinery, equipment, and certain software -- placed in service in tax years beginning in 2010.  This annual expensing limit was reduced (but not below zero) by the amount by which the cost of qualifying property placed in service in tax years beginning in 2010 exceeded $800,000 (the investment ceiling).  Under the new law, for tax years beginning in 2010 and 2011, the $250,000 limit is increased to $500,000 and the investment ceiling to $2,000,000.

The new law also makes certain real property is eligible for expensing.  For property placed in service in any tax year beginning in 2010 or 2011, the up-to-$500,000 of property expensed can include up to $250,000 of qualified real property (qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property).

Extension of 50% bonus first-year depreciation
Businesses are allowed to deduct the cost of capital expenditures over time according to depreciation schedules.  In previous legislation, Congress allowed businesses to more rapidly deduct capital expenditures of most new tangible personal property, and certain other new property, placed in service in 2008 or 2009 (2010 for certain property), by permitting the first-year write-off of 50% of the cost.  The new law extends the first-year 50% write-off to apply to qualifying property placed in service in 2010 (2011 for certain property).

Boosted deduction for start-up expenditures
The new law allows taxpayers to deduct up to $10,000 in trade or business start-up expenditures for 2010.  The amount that a business can deduct is reduced by the amount by which start-up expenditures exceed $60,000.  Previously, the limit of these deductions was capped at $5,000, subject to a $50,000 phase-out threshold.

Deductibility of health insurance for the purpose of calculating self-employment tax
The new law allows business owners to deduct the cost of health insurance incurred in 2010 for themselves and their family members in calculating their 2010 self-employment tax. 

Allow rollovers from elective deferral plans to designated Roth accounts
The new law allows 401(k), 403(b), and governmental 457(b) plans to permit participants to roll their pre-tax account balances into a designated Roth account.  The amount of the rollover will be includible in taxable income except to the extent it is the return of after-tax contributions.  If the rollover is made in 2010, the participant can elect to pay the tax in 2011 and 2012.  Plans will be able to allow these rollovers immediately as of September 27, 2010. 

URGENT - SPECIAL NOTICE for ALL Indiana Businesses

You may have heard the announcement earlier this year, but on March 1, 2010, the Office of the Attorney General stated that it is now requiring all corporations, partnerships, governmental agencies and nonprofit organizations to file an unclaimed property report by November 1, 2010. 

Read below for more information on what property you may have that qualifies as unclaimed property.

If you find that you do  have unclaimed property to report, there are links at the bottom to help you file online.

We want to clarify that if you find after reading this that your business has nothing to report, you are not statutorily required, but only strongly encouraged to file a negative or zero report. 
We contacted the Indiana Unclaimed Property Division of the Attorney General's office and they confirmed this information for us. 

If you feel as though you would like to file as encouraged by the state, there is a new tool accessible online for filing negative/zero reports.  Please go to this link:
http://ucp.indianaunclaimed.com/attorneygeneral/ucp/reporting.html. 
Click on Zero Reporting and you will be taken to a page where you can click another link to file. 

Property can become lost through a variety of ways: address change, misplaced, account records destroyed, people passing away without adequate asset records, etc.  Common types of property which may pertain to your business include:

• Uncashed checks and money orders 
• Unclaimed wages

To fulfill your responsibility as a potential holder of unclaimed property, follow these steps:

• Examine records to find all unclaimed property
• Determine the owner of the property
• Verify the owner has made no verbal or written contact with you concerning the property
• Attempt to contact the owner by first class mail at last known address
• Complete in no less than 60 days, but no more than 120 days, before filing report
• Pay owners you locate
• Report all unclaimed property to the state Common types of property which may pertain to your business include:

If your legal entity is a business association (partnership, corporation, etc.), under Indiana law you are required to report and remit unclaimed property to the Indiana Attorney General's Unclaimed Property Division whenever the property owner cannot be found.   

Remember, if you have no unclaimed property to report, you are only strongly encouraged to file a zero report, but not required.

For more information, visit the IndianaUnclaimed.com website or go here to register your business online and create an account for filing online.

Click here for your copy of the Unclaimed Property Detail Sheet. 

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