The tax break on the verge of extinction is known as
carry-back, which allows savers to make a contribution to a pension but treat it for tax purposes as if the money had been paid in the previous tax year.
Making use of this
carry-back facility could mean saving a significant amount of tax as well as bringing a welcome boost to the pension pot.
PKF's Beverly Lavin said: ``It is particularly important that contributors get
carry-back elections right this year as many will be making large contributions with the intention of mopping up unused tax relief for earlier years.
For Americans who have waited for action on the housing crisis - only to see handouts and bailouts for corporations - it is particularly encouraging that despite heavy lobbying from corporate homebuilders, Congress rejected a $25 billion taxpayer handout in the form of a net operating loss
carry-back provision.
Over 110,000 Australian companies are closer to benefitting from new tax breaks after legislation for a loss
carry-back initiative passed the House of Representatives last night, despite the Coalition refusing to support it.
Carry-back can be particularly valuable for self-employed people, especially as they might not know exactly what their profits are until after the end of the tax year, in order to calculate the tax savings.
With manufacturing output down two per cent this year, the ability to
carry-back losses for three years would be of major assistance to those firms' cash-flow, which is often a crucial factor in their survival when trading conditions turn against them.
The
carry-back would allow homebuilders to apply losses from 2008 and 2009 as far back as four years against taxes paid on profits - a two-year extension of the current
carry-back allowance - even though much of the builders' profit came from their own subprime lending and speculative over-heating of the market.
However, the tax relief that is still available is very attractive and
carry-back is a great opportunity to use them in full.
Company B has an unused FTC
carry-back of $1,000,000 available from 1991 to carry back to 1989.
The
carry-back provision would allow homebuilders to apply losses from 2006 and 2007 as far back as five years against taxes paid on profits - a three-year extension of the current
carry-back allowance - even though much of the builders' profit came from their own subprime lending and speculative over-heating of the market.
As previously announced by the Company in April 2002, under the first provision of the Job Creation and Worker Assistance Act of 2002 signed into law in March 2002, the Company was allowed to
carry-back its' 2001 loss five years to 1996, instead of two years under previous law.
