Tax Relief, Chapter 2004

Two new tax laws have serious implications for taxpayers and carry an assortment of effective dates that will keep tax practitioners on their toes. Intending to stimulate the economy and create new jobs, Congress passed the Working Families Tax Relief Act (WFTRA) and the American Jobs Creation Act (AJCA) in 2004. This article describes their major provisions and offers planning tips to help CPAs get maximum advantage for their clients and employers. Known as the Extender Act, WFTRA continues tax cuts from the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA). The AJCA directly addresses the issue of export subsidies that were ruled to be illegal by the World Trade Organization and subject to sanctions by the European Union. The act repeals the foreign sales corporation/extraterritorial income system of taxation and generally reduces tax rates for domestic manufacturers.