President Barack Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act last month. What’s it mean? The National Lumber and Building Material Dealers Association explains:
Individual Tax Rates: Extends the 35% tax bracket for an additional two years.
Payroll Tax: A temporary 2% reduction in employee-paid Social Security payroll taxes for 2011.
Capital Gains & Dividends: Extends the current capital gains and dividends rates (15% for those in the 25% bracket and above) through 2012.
New Energy-Efficient Home Credit (45L): Extended through 2011 (lapsed after 2009).
Energy Efficiency Home Remodeling Credit (25C): Extended through 2011 at pre-ARRA levels, 10% up to $500, with a $200 cap on window purchases. Changes product criteria to Energy Star for windows, doors and skylights. (This was previously 30% up to $1,500 for 2009 to 2010.)
Bonus Depreciation: The law extends and temporarily increases the bonus depreciation provision for investments in new business equipment.
Tax benefits for certain retail improvements: The act extends for two years (through 2011) the special 15-year cost recovery period for certain leasehold improvements. For more information, visit dealer.org.