On May 25th, President Bush signed the Small Business and Work Opportunity Tax Act of 2007 into law. The Small Business Tax Act is meant to target predominately small businesses with nearly $5 billion in tax incentives. Some of those changes are:

• For tax years 2007 through 2010, Code Sec. 179 for expensing major purchases has been increased from $100,000 to $125,000 annually and raises the investment limitation to $500,000.
• The Work Opportunity Tax Credit was set to expire for employees hired after December 31, 2007. This credit will now be available to small business through August 31, 2011.
• Relief is now available to husband and wife business ventures. Now an unincorporated business venture with a husband and wife as the only members can elect to NOT be treated as a partnership. This will eliminate the additional costs of having to file both a partnership and personal return for these type of businesses.
• Not so nice changes include the raising of the age limit of children under the "kiddie tax" laws. This becomes effective after May 25, 2007 and the age now includes (1) all children under age 19 and (2) students under age 24. Be sure to talk with your tax advisor if any of your children are attending college and want to sell off any investments for tuition.

These are just a few changes that may affect you. Other changes have occurred in earnings and profits for corporations and passive income rules for Sub-S corporations.

Finally, BE CAREFUL, if you pay your tax due with a check and the amount is over $1,250 and the check is returned by the bank, the IRS will charge you a penalty of 2% of the tax due. The minimum fee on all returned checks now is $25, up from $15.