Update on S-Corp Taxation

This just in from the S Corp Association of America:

Payroll Tax Dropped from Extenders

During consideration of the small business bill, Finance Chairman Max Baucus (D-MT) sought to add a new package of “tax extenders” to the bill. Republicans blocked the effort, pointing out that this was a wholly new package and that once again the minority was being blocked from offering amendments on the Senate floor.

The core of this package (the fourth or fifth version he has put together over the past year) would extend for 2010 all the provisions that expired at the end of 2009 — the R&E tax credit, state sales tax deduction, the S corporation charitable deduction, etc.; it also includes a number of unrelated spending items.

More good news for S corporations: the payroll tax hike included in earlier versions of the extender package is not included here. With the short calendar we don’t expect this issue to return this year, but it will return. We’ll continue to work to make certain any provision drafted to address this issue is well constructed and doesn’t target law-abiding S corporations.

Owen S. Arnoff, Enrolled Agent
Admitted to Practice Before the Internal Revenue Service
http://www.betterbusinessventures.com
Sacramento Tax Consulting
Sacramento Tax Preparation
Sacramento Tax Representation
IRS Tax Help, Bookkeeping Services, Payroll Services