Look For More End-of-the-Year Changes to Come | Tax Tip of the Week | No. 121

The Latest Tax Law Changes

Congress recently passed legislation repealing a provision that would have required federal, state and local governments to withhold 3% of any payments over $10,000 from government contractors and certain other vendors.  The provision was intended to combat tax avoidance, but critics argued that it would restrict the cash flow of businesses and was too costly to implement.In addition to repealing the withholding requirement related to government contractors, this bill also:- Expands tax incentives to encourage employers to hire veterans- Expands the IRS’s continuous levy authority- Extends the authority of the US Department of Veterans Affairs to obtain information from the IRS- Directs the Treasury Department to prepare a report on how to reduce the tax gap attributes to federal contractorsTo pay for the $12.8 billion cost of the 3% withholding repeal and expanded hiring incentives for veterans, the legislation adjusts the calculation of the modified adjusted gross income for determining eligibility for certain federal health care programs.  It also delays scheduled reductions in fees for VA mortgage applications.We expect there will be continued tax law changes based on the actions---and inactions of Congress in the coming weeks.We’ll keep you posted.You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt - the guy behind TTWTax Tip of the Week Video Series:http://www.youtube.com/user/bradstreetcpas?feature=mhee#p/u/0/XdYGlaFwbD4