Fall 2010 issue of Horizons

3. Worker, Homeownership & Business Assistance Act of 2009 Engineering companies should be aware that this legislation increases the penalties for late-filing tax returns for S-corporations and partnerships, including LLCs treated as partnerships. The late-filing penalty has more than doubled, from $89 to $195 per month per shareholder or partner for each month that a return is filed after the deadline (including extensions). If you have an S-corp, partnership, or LLC, be sure to file those extensions.

individual taxpayers) determined without regard to the deduction. In general, the amount of deduction allowable for any taxable year is limited to 50 percent of W-2 wages paid by the taxpayer. To define qualified production activities income, it is the excess of the taxpayer’s domestic production gross receipts over the sum of the cost of goods sold allocable to those receipts, other deductions, expenses, or losses directly allocable to such receipts, and a ratable portion of other deductions, expenses, and losses that are not directly allocable to such receipts or another class of income. Furthermore, domestic production gross receipts are gross receipts of the taxpayer derived from engineering or architectural services performed for construction projects in the United States. In comparison to many items, this increase from 6 to 9 percent is one tax savings that will be available this year. While the work opportunity tax credit has been around since 2007, it is important to note that through this bill, it was extended through August 31, 2011. Engineering companies that want to take advantage of this credit should study the target groups it is intending to benefit as you may already be eligible for this credit, but have not yet filed for it. For more information on the target groups, please contact RubinBrown and we will be happy to assist you. In addition, the Small Business & Work Opportunity Act helps small businesses with the expanded net operating loss carryback and the built-in gain rules for S Corporations. 2. Small Business & Work Opportunity Act

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