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CCH can assist you with stories, including interviews with CCH subject experts.
Also, the 2008
CCH Whole Ball of Tax is available in print. Please
contact:
Leslie Bonacum
(847) 267-7153
mediahelp@cch.com
Neil Allen
(847) 267-2179
neil.allen@wolterskluwer.com
Link to special CCH Tax Briefings on key topics from 2007:
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2008 CCH Whole Ball of Tax
Tax Laws in 2007 Made Some Changes, Left Much Unresolved
(RIVERWOODS, ILL., January 2008) – It was a back-loaded year for federal tax legislation in 2007, with major questions still open as Congress neared adjournment, according to CCH, a Wolters Kluwer business and a leading provider of tax, accounting and audit information, software and services (CCHGroup.com). Only three significant tax laws made it through to the President’s desk for signing, two of which passed in the closing days of the legislative session in December.
Left unresolved are possible extensions of several provisions that expired at the end of 2007, including the state and local sales tax deduction, the higher education tuition deduction and the teacher's classroom expense deduction. Also left for consideration in 2008 is a package of provisions relating to members of the military and any further “fix” for the alternative minimum tax.
Here are the major provisions of the legislation:
Small Business and Work Opportunity Tax Act of 2007
- Expanded the “kiddie tax” to cover children up through age 18 – through age 23 if they are college students – beginning in 2008.
- Extended and expanded the Section 179 enhanced expensing provisions through 2010. Under Section 179, businesses are permitted to deduct in one year outlays for equipment that would otherwise have to be depreciated over several years.
- Provided for a 2007 increase in the Section 179 expensing limit from $112,000 to $125,000, with the phase-out level increasing from $450,000 to $500,000, still limiting its benefits to relatively small enterprises.
- Extended Section 179 expensing for Go Zone businesses (those devastated by Katrina and other recent hurricanes) through 2008.
- Extended through August 31, 2011 the Work Opportunity Tax Credit (WOTC), which benefits businesses that hire members of certain “target groups” such as welfare recipients. The law also expanded the WOTC to allow credit to employers who hire veterans and individuals in counties that have suffered population loss.
- Allowed employers to take a full FICA tip credit despite an increase in the federal minimum wage.
- For tax years beginning after December 31, 2006, when a married couple operates a business, allows each spouse to take into account his or her share of income, gain, loss and other items as a sole proprietor.
- Expanded preparer penalties to all types of tax returns, such as employment, excise, exempt organizations, estate and gift tax and raised the amounts of the penalties and expanded the standard of conduct subject to penalty.
- Closed some of the traps that could trigger termination of S corporation status.
Tax Increase Prevention Act of 2007
- Set the 2007 AMT exemption amounts at $44,350 for single taxpayers, $66,250 for married couples filing jointly and $33,125 for married filing separately.
- Extended for the 2007 tax year the ability of taxpayers to use most nonrefundable personal credits to offset their AMT liability. (Altogether, the “patches” for 2007 will keep about 20 million taxpayers out of the clutches of the AMT.)
Mortgage Forgiveness Debt Relief Act of 2007
- Excluded discharges of up to $2 million of indebtedness from taxation if the debt is secured by a principal residence and if it was incurred in the acquisition, construction or substantial improvement of the principal residence. This special relief is available for three years, retroactively applied for discharges from January 1, 2007, through December 31, 2009. Taxpayers who take advantage of this new provision will have to reduce their “basis” in their homes by the amount excluded.
- Extended the deduction for qualified mortgage insurance premiums for three years, through January 1, 2011. Applies to debt accrued after December 31, 2007, but only for contracts entered into after December 31, 2006 and prior to January 1, 2011.
- Effective January 1, 2008, gives a surviving spouse two years in which to sell a home that was jointly owned and occupied with a spouse and still take advantage of the $500,000 gain exclusion for joint filers.
About CCH, a Wolters Kluwer business
CCH, a Wolters Kluwer business (CCHGroup.com) is a leading provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals and their clients since 1913. Among its market-leading products are The ProSystem fx® Office, CorpSystem™, CCH® Tax Research NetWork™, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill.
Wolters Kluwer is a leading global information services and publishing company. The company provides products and services for professionals in the health, tax, accounting, corporate, financial services, and legal and regulatory sectors. Wolters Kluwer had 2006 annual revenues of €3.4 billion, employs approximately 18,450 people worldwide, and maintains operations across Europe, North America, and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. For more information, visit www.wolterskluwer.com.
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