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How Do You Spell Relief?

If you're still in the dark about what the Taxpayer Relief Act of 1997 means to you, accounting firm Lopez Edwards Frank & Co. LLP invites you to see the light at its Web site: http://www.lef.com

While the new tax law doesn't offer a great many benefits to small businesses, says James Kinney, a partner in the Long Island, New York, firm, "it does provide a more favorable capital gains rate of 20 per-cent in 1998, compared with 28 percent in 1997, on any interest in a corporation or partnership held more than 18 months. It also eliminates the Alternative Minimum Tax for small corporations with three-year average gross receipts of less than $5 million."

Other tax changes affecting entrepreneurs:

  • Deductible health-insurance costs for the self-employed will increase from 40 percent for 1997 to 45 percent in 1998 and up to 50 percent in 2000.
  • The law created a new type of individual retirement account (IRA) dubbed the Roth IRA. This doesn't yield deductions when you put money into it but will result in tax-free distribution for payouts made after five years if the taxpayer is at least 59-and-a-half years old or because of death, disability or the need to pay for certain first-time homebuyer expenses.
  • The definition of "homebased businesses" now includes those without an outside office who conduct administrative or management activities at home.

In addition to a summary of the tax legislation, the site allows visitors to ask accounting and tax questions and even offers a free newsletter.

Contact Sources

America's Business Funding Directory, abdf@businessfinance.com

Lopez Edwards Frank & Co. LLP, (516) 872-3400.

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