Tennis Industry magazine

 

Last-Minute Tax Breaks That Can Save You Money

By Mark E. Battersby

Many tennis shop and facility owners may be overlooking a number of tax breaks under the false impressions that they had expired. Still other tax breaks, that may have been considered too complex in the past, have now been clarified thanks to the last-minute passage of a tax law.

The Tax Relief and Health Care Act of 2006, passed late in December, extended a number of expired or expiring tax breaks. Covered were provisions such as sales tax deductions for people in states without income taxes, the tax deduction for college tuition, a tax credit for hiring welfare recipients and others facing difficulties finding jobs, tax credits for alternative energy producers, and purchases of solar energy equipment by homeowners and businesses. All told, the extension of expiring and expired tax breaks, along with several new tax provisions, are expected to save taxpayers $38 billion over the next five years.

Regardless of whether you’ve already filed your annual tax returns, have taken advantage of the automatic extension of time to file those returns, or are in the process of preparing income tax returns, you and your tax adviser should review these tax breaks.

How You Can Save

Among the tax breaks likely to be of most interest to your business are:

On a Personal Note

The new tax legislation is not all business. In fact, only a few of its provisions benefit the average tennis facility and business or are related to business. By far, the majority of the extended or resurrected provisions in this bill apply to individuals. Those provisions cover such things as:

After The Fact

The extenders bill passed after the IRS printed the 2006 tax year materials. Although the IRS will not be revising the printed tax forms, it plans a “media blitz” to alert taxpayers that the extenders are back and should not be overlooked in preparing 2006 returns (visit www.irs.gov for more details) and to claim the retroactively resuscitated tax breaks. Publication 553 (Highlights of 2006 Tax Changes) is expected sometime in the first quarter of 2007.

Fortunately, tax laws now permit automatic extensions of time in which to file income tax returns — but not the taxes due. If the tax returns have been filed, you can also correct errors and omissions on that already-filed return — including previously overlooked or neglected deductions and tax credits and to claim a refund — by filing Form 1040X for individuals or Form 1120X for corporations that filed Form 1120. Generally, you can file a claim for refund within three years from the time the return was filed.

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About the Author

Mark E. Battersby is a tax advisor and author in Ardmore, Pa.

 

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