$6.1B KATRINA RELIEF BILL HEADS TO PRESIDENT: Despite concerns over the rising deficit, both houses of Congress sent a $6.1 billion Katrina tax-relief bill to President Bush for his signature without a dissenting vote being cast.The House gave its approval on a 422-0 vote, and the Senate moved the legislation through without a roll call. At press time, the president was expected to sign it.
Individuals and businesses will see a waiver of rules limiting personal-casualty deductions, and taxes on early IRA withdrawals and cancelled debts, as well as time extensions for spending insurance settlements without paying taxes. More employers will be eligible for Work Opportunity Tax Credits and for employee-retention tax credits. In 2005, tax limits on individual and corporate cash donations will be waived and deductions for donating books to public schools can be taken.
Congress's current calendar means a deficit-reduction measure promised last spring - likely in the neighborhood of $35 billion over five years - will come to the floor in late October. Around the same time, a third supplemental spending request from President Bush for Katrina is expected.
The $6.1 billion estimate represents the five-year impact of the bill, but about $5.9 billion will be spent over the next two years. Other measures on the table for another round of relief proposals include offering tax-exempt bonds as private financing through both federal and state governments.
RIA CALCULATES NEXT YEAR'S TAX BRACKETS: RIA, a part of the Thomson Corp. providing information and software to tax professionals, has computed the changes to next year's tax brackets, standard deductions, personal exemptions and other important tax breaks.
The IRS is not required to release the 2006 tax figures until Dec. 15, but analysts at RIA have used the past year of consumer price indexes (ending in August 2005) to put together new tables to allow individuals and businesses to get a head start on their year-end tax planning.
"Knowing next year's tax figures now makes it possible to maximize tax breaks this year and next year by giving individuals and businesses more time to evaluate their tax situations and to implement strategies to achieve the highest tax savings," said RIA senior tax analyst Bill Massey, in a statement.
RIA's calculations for 2006 include the basic standard deduction, rate schedules for joint filers and singles, rate brackets for heads of households, as well as estates and trusts, and projections for the alternative minimum tax exemption, the earned income tax credit and education credits.
The full listing of the estimates can be accessed at www.ria.thomson.com/home/tax_brackets.pdf.
TAXWARE INTEGRATES WITH ORACLE'S PEOPLESOFT: Salem, Mass.-based Taxware, a tax calculation and compliance software developer owned by First Data Corp., has unveiled a new integration with Oracle's PeopleSoft.
Taxware Enterprise 4.3, a financial and tax compliance application, now integrates with both Oracle's PeopleSoft Enterprise Financial Management 8.9, an audit and internal control solution, and PeopleSoft Enterprise Supply Chain Management 8.9, an application that allows users to adjust and monitor the supply chain from their customers to suppliers.
"Oracle customers, no matter what industry, typically have a transactional tax compliance need," said Tony Chavez, vice president of enterprise solutions at Taxware. "By building the integration for this version of this application, we're giving them a more powerful, flexible engine."
Taxware already integrates with PeopleSoft products; however, this integration expands tax calculations from a national to an international level and provides a more seamless integration. With Taxware Enterprise adopters, added Chavez, Oracle's PeopleSoft automatically communicates with a user's Taxware product when a tax calculation is needed.
New Taxware Enterprise adopters are also integrated with Oracle 11i E-Business Suite applications, including Oracle's PeopleSoft Enterprise 8.8, PeopleSoft CRM Version 8.9 and Oracle Receivables, Payables and Purchasing.
The products are purchased through an annual licensing fee, which depends not on a number-of-users model but on the number of jurisdictions that the user wants to calculate tax for and the number of benefits the user desires. Hosting is also available at an added fee. For more information, visit www.taxware.com.
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