2005 - A Year of Change
Tax and Financial News
2005 - A Year of Change
Hurricanes Katrina, Rita and Wilma reeked havoc in the Gulf Coast region of the United States, but the effects were felt throughout the United States. As the residents of a major U.S. city were relocated throughout the United States, people could not obtain the information required to file their income tax returns and even carry on business as usual. The Gulf Coast Region of the United States was the hardest hit, but many businesses in these areas provide information to non-Gulf Coast taxpayers critical in the preparation of their tax returns.
Congress wrestled with the appointment of two new Supreme Court Justices and many lower court judges throughout the year. A long awaited energy bill was signed into law and Congress wrangled over extending expiring tax provisions, funding the war on terrorism, and seeking ways to help those most affected by the 2005 hurricanes and numerous issues.
The good news is that citizens of the United States of America can hold their heads high at their response to all the changes just mentioned. U.S. citizens opened their hearts, homes and pocketbooks in an effort to help those from the hurricane ravaged Gulf Coast. Many volunteers came to help in the initial phases of cleanup and building shelter for those who lost everything at the hands of Mother Nature. All-in-all, America and Americans proved that they could take care of each other when disaster strikes.
Throughout 2005, this column was geared toward informing you of recent changes in tax laws and ways in which you could minimize your tax bill. What follows is a brief summary of the major tax law changes during 2005, and there were many. Between the effect of 2004 law changes taking effect in 2005 and the changes brought by new legislation in 2005, Americans face a daunting challenge in preparing their income tax returns for 2005. Perhaps this years battle cry should be, "Thank God for good income tax software!"
The Energy Tax Act of 2005 created or enhanced incentives to both enhance the Nations energy supplies and conserve them. Those provisions which most affected what you pay in taxes were considered in the 2005 articles. Between providing enhanced tax credits for energy conservation expenditures and incentives for enhancing the Nations current energy supplies and research into alternative fuels, Congress completed and the President signed into law critical legislation that had been in the works for quite a few years.
The Katrina Emergency Tax Relief Act of 2005 offered incentives to employers in the hurricane ravaged Gulf Coast to begin the business of rebuilding that region and putting its people back to work. As a way to assist those who gave shelter and monetary support to victims of Katrina, several provisions dealing with charitable contributions and additional exemptions for housing victims were added temporarily to the tax code. Pension distribution rules were relaxed to assist families in funding the rebuilding of their lives, and funds to assist in the reconstruction of towns and cities in the Gulf Coast Region were provided.
The Gulf Opportunity Zone Act of 2005 extended many provisions of the Katrina tax relief act to apply to victims of hurricanes Rita and Wilma. In addition to providing relief to the victims in terms of individual and business tax relief, Congress made various technical corrections to the tax code and reallocated funds from other Federal programs.
Books have literally been written on all of these new laws and this article does not propose to go into great detail on the changes. Suffice it to say that this is a year in which you should be extra careful to read the tax law changes section of your tax packages when they arrive. This applies to individuals and businesses.
This firm looks forward to serving you this year and providing excellent tax, financial and accounting assistance to you, our friends and clients. If you have any questions or concerns regarding the new tax laws, please do not hesitate to call. In the meantime, please accept our thanks for your patronage and most especially for the way in which you reacted to the needs of our fellow Americans in 2005. Have a very Happy and Prosperous New Year.
These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.