Stocks Hit Highest Level in 2 Years

Finally, some good news on the economy to report! When Obama signed the tax compromise deal it sent Stocks to their highest levels in 2 years. The S&P 500 gained 1.3% for the week. Is this the beginning of the end of our tough times?

From USA Today.com:

An encouraging trade report and signs that a tax cut package would pass the Senate sent stocks to their highest levels in two years Friday. Bond prices fell for another day as investors expected the tax deal to lead to economic growth and higher budget deficits.

The Commerce Department reported that the U.S. trade deficit fell to its lowest level in nine months in October. Growing demand for American goods overseas pushed exports to their highest level in more than two years.

Separately, the Treasury Department said the federal government's budget shortfall hit $150.4 billion in November. Treasury prices dropped after the report was released, pushing their yields higher. The yield for the 10-year note rose to 3.33%, up from 3.21% late Thursday.

The Standard & Poor's 500 index rose 7.40, or 0.6%, to 1,240.40. It was the third straight day that the S&P index closed at a new high for the year. The index has gained 11.2% this year and is now trading at the same price it did the week before Lehman Brothers filed for bankruptcy in September 2008.

The Dow Jones industrial average rose 40.26, or 0.4%, to 11,410.32. General Electric led the 30 stocks that make up the index with a 3.4% jump to $17.72. GE said it planned to raise its dividend by 17%.

The Nasdaq composite index rose 20.87, or 0.8%, to 2,637.54.

The Dow was the weakest of the three main stock average for the week, gaining just 0.3%. The S&P 500 added 1.3% and the Nasdaq rose 1.8%.

Read more here

The Tax Implications of The New Small Business Jobs Act

In September President Obama signed the Small Business Jobs act into law. The legislation was designed to provide tax cuts to small businesses and increase access to small business capital with a $30 billion fund for local community banks. Just one week after being signed into law the Small Business Administration was able to approve nearly 2,000 loans for nearly $970 million. There were 8 main tax implications of the new legislation, and I have put together the following list of how these changes will affect small business owners.

1. Capital Gains from Business Investments

The first tax cut included in the legislation is a 75% exclusion from capital gains taxes for key small business investments. The act also puts another provision into tax law that will eliminate all capital gains taxes on these investments if they are held for five years. It even eliminates the alternative minimum tax on these sales. The White House estimates that this change will affect over one million small business owners.

2. Expense Investment Limits

The bill raises the amount of investments that businesses can write off for 2010 and 2011. The limit was raised from $250,000 to $500,000. It also expands Section 179 to include improvements to rental property. However, these provisions will expire at the end of 2011.

3. Bonus Depreciation

The act also restores the 50% first-year depreciation for qualifying property through the end of 2010. The President claims that it will allow 2 million businesses to make new investments to stimulate the economy.

4. Self-Employment Deduction

In addition to deducting health insurance expenses for themselves, small business owners and self-employed taxpayers can deduct the cost of their family’s health insurance premiums from their taxable income.

5. Cell Phone Expenses

The legislation also makes it easier for a business to deduct or depreciate cell phones. Before, cell phones were included in the listed property category, meaning that if they were not used mostly for a business purpose then the deduction would be subject to strict limits. However, now the IRS has removed this documentation requirement so that virtually every business owner can qualify for the deduction.

6. Start-Up Expenses

To encourage taxpayers to open new businesses, the bill has increased the amount of start-up expenses that can be deducted. The limit was temporarily raised from $5,000 to $10,000 and the cap on expenditures that triggers a phase-out was increased from $50,000 to $60,000.

7. Five-Year Carry Back

The Small Business Jobs Act also allows qualifying business owners to “carry back” their credits to offset five years of taxes, while also allowing the credits to offset the Alternative Minimum Tax. To ensure that this law only affects small business owners, qualifying businesses must have less than $50 million in annual gross receipts.

8. Limitations on Penalties for Errors

The final tax change in the legislation limits the penalty for failing to report certain tax transactions to a percentage of the tax benefits from the transaction. The penalty had been criticized for imposing a large burden on small businesses.

Nickel and dimed by Obama's microtaxes

According to a Fortune magazine survey almost half of taxpayers feel they aren’t getting what expect with their tax dollars. To add to this, some taxpayers will be soon paying a lot more in taxes. The taxing nuggets President Obama has included within the health care reform act are being referred to as a “nickel and diming” tactic because of the variety of new taxes sprinkled throughout the bill that target high earners.

I started to talk about these proposed taxes back in April on my blog here. The reform act includes a 3.8% tax on interest and dividends. There will also be a .09% increase in the Medicare payroll tax. Currently the Medicare payroll tax is 2.9% on all wages, with the worker and his employer each paying 1.45%. Under the new 2013 Medicare payroll tax increase a high income individual will be paying 2.35% of their wages.

Please read more CNNMoney.com here.

Discussing the Tax Implications of Obama’s Policies on the Charles Payne Show

Last week, I made an appearance on KFI-AM's the Charles Payne Show. During my segment, I discussed the Obama’s administration and how the President’s policies will affect the American taxpayers. The video embedded below features the audio from my interview, you can watch it below or checkout my YouTube channel.

Obama’s Non- Tax Reform Commission

From TaxVox:

In a month, if White House officials are to be believed, the Obama Administration will unveil the tax reform report of the President’s Economic Recovery Advisory Board. Despite once-high expectations, it is likely to be a waste of everyone’s time.

The Board (the PERAB in Washington-speak) is hardly a bunch of economic lightweights. Chaired by ex-Federal Reserve Chairman Paul Volcker, its members include economist Marty Feldstein, GE CEO Jeff Immelt, venture capitalist John Doerr, former CEA chair Laura Tyson, and other stars of Wall Street, Main Street, academia, and labor. Its chief economist is Austan Goolsbee, a top-notch researcher who has had close ties to President Obama for years.

Yet the reform panel—technically a PERAB subcommittee—is going to produce…a mouse. From its earliest days, the group was forced to work under impossible constraints. Chief among them: Obama’s insistence that no one earning less than $250,000 should pay higher taxes. Exempting more than 95 percent of families and individuals from tax hikes of any kind essentially shut the door on any serious discussion of reform, which inevitably creates winners and, yes, losers.

Once individual taxes were taken off the table, the panel was charged to look at corporate tax reform, enforcement issues, and simplification. But even on those limited topics, the panel will make no recommendations. A few months ago, we were told it would produce a document that looks something like CBO’s revenue options—listing a narrow range of ideas without actually endorsing any of them.

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Roni Offers Expertise On Ms. CEO Show

Last Tuesday, I appeared on the Ms. CEO radio show and provided practical advice for businesswomen across the country. I also gave advice on what businesses will likely flourish under the new Obama administration, and even took questions from listeners. Check out the link below to an mp3 of my segment and learn how you leverage Obama's tax policies to work in your favor!

Roni Deutch on the Ms. CEO Show