Taxation Legal News

President Bush Signs Tax Relief Extension Reconciliation Act of 2005
   
Today, President Bush Signed The Tax Increase Prevention And Reconciliation Act Of 2005, Extending His 2003 Tax Cuts On Dividends And Capital Gains. This legislation also contains an Alternative Minimum Tax (AMT) patch enabling millions of middle income families to avoid paying higher taxes in 2006. In The Past Five Years, The President's Tax Relief Has Helped Spur Growth By Keeping $880 Billion In The Pockets Of American Taxpayers. We reduced taxes for every American who pays income taxes, doubled the child tax credit, reduced the marriage penalty, created new incentives for small businesses to invest, and put the death tax on the road to extinction. The American people have used the tax relief to provide for their families, create jobs, and help make America's economy the envy of the industrialized world. The President's tax relief helped our economy grow at a strong 4.8 percent annual rate in the first quarter and helped our economy create more than 5.2 million jobs since August 2003.

The President's Tax Cuts On Dividends And Capital Gains Have Succeeded In Lowering The Cost Of Capital And Encouraging Businesses To Expand And Hire New Workers. Lower tax rates on dividends and capital gains reduced the effective tax rate on business investment by more than 15 percent. When these cuts were passed in 2003, business investment had been dropping for several years. Since then, business investment has been growing at more than 9 percent per year. Spending on equipment and software has hit record levels, and businesses have hired millions of new workers to fill the jobs this investment creates. The President's Tax Cuts On Dividends And Capital Gains Are Reaching Families And Businesses Alike. About half the households in America - 57 million in all - have some investment in the stock market. By cutting the taxes on dividends and capital gains, we helped add about $4 trillion in new wealth to the stock market and benefited Americans who own mutual funds, IRAs, and 401(k) plans.

Dividend Tax Relief Benefits The More Than 28 Million Americans Who Rely On Dividend Income. In 2003, 7 million seniors received income from dividends. In 2004, The Number Of Companies Paying Dividends Increased By 7.2 Percent Over 2003 - The Highest Since 1998. In 2004, The Amount Of Dividends Paid By S&P 500 Companies Reached A Record Level Of $213.6 Billion, An Increase Of 33 Percent Over 2003. The Temporary Alternative Minimum Tax (AMT) Patch Contained In The Tax Relief Package Enables About 18.2 Million Taxpayers To Avoid Facing Higher Taxes. In 2005, about 4 million taxpayers were affected by the AMT. Without this temporary patch, the number would have risen to 22.2 million taxpayers in 2006.

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	Did You Know?
	Form 5471 is Information Return of U.S. Persons With Respect to Certain Foreign Corporations Report information with respect to certain foreign corporations. A domestic partnership may have to file Form 5471 if it: Controls a foreign corporation; or Acquires, disposes of, or owns 5% or more in value of the outstanding stock of a foreign corporation; or Owns stock in a corporation that is a controlled foreign corporation for an uninterrupted period of 30 days or more during any tax year of the foreign corporation, and it owned that stock on the last day of that year.