Talking Shop Blog

As widely reported, Springfield lawmakers have approved the Sears and CME Holdings tax incentives. Governor Quinn has indicated that he will sign the legislation.

Here are some of the other tax provisions contained in the bills:

•             The R & D credit has been extended for an additional 5 years—through tax years ending before January 1, 2016.  The change allows for a full 5 year carry forward of earned credit.

•             The net operating loss deduction is reinstated for tax years ending 12/31/12 through 12/31/14, but is capped at $100,000 per year.  The life of the carry forward period is extended by a year for each year the loss carry forward is either suspended or limited by the cap.  

•             The estate tax exemption is increased to $3.5 million for 2012 and to $4 million for 2013 and thereafter.

•             The Replacement Tax income tax investment credit is extended for another 5 years.  It was scheduled to expire 12/31/13 and will now remain in place through 12/31/18.

•             The personal income tax standard deduction will be indexed beginning next year. The standard deduction for 2012 will increase from $2000 to $2050. For 2013 and thereafter, the $2050 standard deduction will automatically be increased based on increases in the consumer price index.

The IRS has released the 2012 optional standard mileage rates for use of an automobile for business, medical, moving and charitable purposes.

The 2012 standard mileage rate remains unchanged at 55.5 cents per mile for business use of a vehicle, including cars, vans, pick-ups and panel trucks. 

The rate is reduced to 23 cents per mile for medical and moving uses, and remains at 14 cents per mile for charitable uses.

The updated rates are effective for deductible transportation expenses paid or incurred on or after January 1, 2012, and for mileage allowances or reimbursements paid to, or transportation expenses paid or incurred by, an employee or a charitable volunteer on or after January 1, 2012.

You can find more information from the IRS at http://www.irs.gov/newsroom/article/0,,id=250882,00.html