Supreme Court gives IRAs protection in bankruptcies
The U.S. Supreme Court issued a unanimous decision recently that will protect
individual retirement accounts (IRAs) from creditors in bankruptcy proceedings.
Until this decision, company pensions and 401(k) plans were protected under
federal law, but IRAs were not.
IRS raises its interest rates
The IRS will charge 6% interest on individual and corporate tax underpayments
for the second quarter of 2005 (April 1 through June 30). Large corporate
underpayments will be assessed interest at 8%. On tax overpayments, the IRS
will pay individuals 6% and corporations 5%. The interest paid on corporate
overpayments exceeding $10,000 will be 3.5%. All of the rates are one percentage
point higher than rates for the first quarter of 2005.
Depreciation limits released
The IRS has issued the depreciation limits for business cars first placed in
service during 2005. For passenger cars, the limits are $2,960 for 2005,
$4,700 for 2006, $2,850 for 2007, and $1,675 for each year thereafter. The
limits for light trucks and vans are $3,260 for 2005, $5,200 for 2006, $3,150
for 2007, and $1,875 for each year thereafter.
Note that first-year depreciation limits for vehicles placed into service in
2005 are considerably lower than the limits for 2004. The reason: 50% bonus
depreciation for new business equipment purchases is no longer allowed. New
rules also apply to heavy sport utility vehicles (SUVs) used in business. SUVs
built on a truck chassis and weighing more than 6,000 pounds are exempt from
the depreciation limits given above. They are, however, subject to a maximum
first-year expensing limit of $25,000.
If you need additional information about depreciation as it applies to your
2005 business equipment purchases, give our office a call.