In the wake of the new Job Creation and Worker Assistance Act of 2002, the IRS has announced plans to change two 2001 tax forms and related instructions to allow for retroactive changes to the tax law.
Form 4562, Depreciation and Amortization, will change to reflect the new 30% bonus depreciation. Taxpayers are entitled to additional depreciation of 30% of the adjusted basis of certain property acquired on or after September 11, 2001. Qualifying property includes property with a recovery period of fewer than 21 years, water utility property, qualified leasehold improvements, and publicly available computer software.
Form 2106, Employee Business Expenses, will change to reflect the increase in first-year depreciation allowed on vehicles subject to a depreciation cap. Taxpayers acquiring such vehicles on or after September 11, 2001 are entitled to as much as $4,600 in addition depreciation due to the 30% bonus now available.
In addition, the instructions to Form 1045, Application for Tentative Refund, will be changed to reflect the new five-year net operating loss carryback provision for losses arising in 2001 and 2002.
Additional information and downloadable forms are expected to be available on the IRS Web site within the week.