Friday, May 28, 2010

Accounting and Tax Trends in 2010

1. Moving from GAAP to IFRS

The SEC has proposed a slow trend towards moving over from GAAP to IFRS. Since IFRS is international, it does have some improvements for financial reporting over GAAP.

2. Increased IRS budget = More tax audits of businesses

Due to the House approval of a $5.504 Billion increase in the IRS budget, expect more tax audits of businesses.

3. Higher taxes due to health care reform

Small businesses should be on the lookout for new taxes due to the passing of the massive health care bill.

4. Cap and trade legislation taxes

The government program for cap and trade is to help limit the amount of emissions from energy usage. If a program is put in place to control this, businesses that exceed their allocated energy usage will have to pay a tax.

5. No AMT reform

The Alternative Minimum Tax has become a great source of revenue. If congress were to eliminate it, other taxes would be raised in order to make up for the loss of revenue.

6. State and local taxes increasing

Due to some states coming very close to bankruptcy, new sources of revenue may have to come from new state and local taxes.

7. E-filing

According to the IRS, electronic filing of taxes has reached an all time high; 67.18% of individuals file electronically. Going forward in 2010, start looking for more e-filing options!

8. Tax breaks for retirement savings

In order to encourage more retirement savings, there have been new tax incentives created for both workers and employers.

9. Possibility of a VAT?

There is a possibility that a Value Added Tax could be imposed in the U.S. This would require a tax in each part of the supply chain, helping the Federal Government gain more of the revenue that they need.

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