Yesterday, the US House of Representatives passed the “American Taxpayer Relief Act of 2012”, which is set to be signed by the President shortly. The bill’s volume of tax extensions is pretty extreme. It extends nine individual tax breaks, 31 business tax breaks, 12 energy tax breaks, as well as partially extending the current tax brackets. Much has already been written about the bill’s impact on individual tax rates. So here are the items most pertinent to Massachusetts businesses and small business owners:

Business Tax Extenders

Section 301 - Extension and modification of research credit – The research credit has been extended for two years, retroactively to January 1, 2012 and through December 31, 2013.

Section 308 – Extension of wage credit for employers who are active duty members of the uniformed services – This tax credit is provided to small business that provide wage payments to active duty members of the armed services. This credit has been extended through December 31, 2013.

Section 309 – Extension of work opportunity tax credit – The work opportunity tax credit is available to business that pay wages to a targeted group. The credit is available for wages paid in the first and second year of employment. There are various targeted groups, but the largest pool are qualified veterans of the armed services. This has been extended through December 31, 2013.

Section 311 - Extension of 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements - This creates a 15 year depreciation life for certain property. It has been extended for two years, retroactively from January 1, 2012 through December 31, 2013.

Section 315 – Section 179 increased expensing limitation – Businesses can deduct the cost of equipment placed in service under what is known as Section 179 deduction. This deduction was set at $139,000 in 2012 and $25,000 in 2013. This has been retroactively increased to $500,000 for 2012 and set at $500,000 for 2013. It is scheduled to revert to $25,000 in 2014.

Section 324 – Extension of temporary exclusion of 100 percent of gain on certain small business stock – Under certain rules, 100% of the capital gain on the sale of small business stock can be excluded from income. Various rules apply, but the stock needs to be held for more than five years. This has been extended for stock acquired in 2013.

Section 326 - Extension of reduction in S-Corporation recognition period for built in gains tax – For businesses that convert to an S corporation, the conversion is not a taxable event. However, following this conversion, the entity must hold the assets for ten years to avoid a tax on any built in gains at the time of conversion. This period has been reduced to five years for sales that occur in either 2012 or 2013.

Section 331 - Extension and modification of bonus depreciation – Bonus depreciation of 50% has been extended through the end of 2013.

Other Pertinent Sections

Section 101 - Permanent extension and modification of the 2001 Bush tax cuts – Amongst other things, this sets the estate tax rate at 40% for individual estates greater than $5 million. The gift tax exemption is also set at $5 million.

Section 102 - Permanent extension and modification of the 2003 Bush tax cuts - It extends the 15% capital gains rates, with an increase to 20% for upper income earners.

Section 103 – Extends of the 2009 Tax Relief – This extends for a period of 5 years the American Opportunity Tax Credit. This is a $2,500 tax credit on qualifying college tuition payments.

Section 104 – Permanent Alternative Minimum Tax (AMT) Relief – This permanently increases the AMT exemption to $78,750 from $45,000, then indexes the exemption to inflation. This is retroactive to the 2012 tax year. The increase in the exemption prevents many from falling under the AMT.

Time is running out in Washington for the country to avoid the fiscal cliff. If that happens, 8 or 9 percent budget cuts would hit the majority of the federal government and could throw the country back into a recession.

So what do you do?

We talked with J. Christopher Boyd, a leader in the Financial Planning Association of Massachusetts and the founder and chief investment officer of Asset Management Resources, LLC. He is a contributor to Boston.com’s Managing Your Money blog and the host of a financial radio show on WXTK 95.1

First things first, he said, “Don’t lose your head. It’s most likely that there will be some legislation after the New Year that will discount some of the tax increases.”
But it is unclear how long it will take for that legislation to go into place.

So Boyd advises people to revisit their W-4 document.

“Most people that work are going to have an increase e in payroll tax,” he said. “Make sure you’re not paying too much.”

He said that capital gains rates and dividends will both see increased rates, so “consider where you hold which investments.”

If a deal is not reached and the economy heads back into a recession an estimated 3.4 million people are expected to lose their jobs. With that in mind, it is a good idea to build up your savings, Boyd said.

Lastly, “You’ve got to be attentive to what’s going on,” he said. “It could affect your whole financial plan.”

But even with the fear of another recession, Boyd said that going through your finances around the new year is a good practice to be in the habit of anyways.

“It’s a good time to take a fresh look at what’s coming next year,” he said.

J. Christopher Boyd, a leader in the Financial Planning Association of Massachusetts, will take your questions live Friday, Dec. 21 at 1 p.m.

J. Christopher Boyd, CFP (Chris) is a leader in the Financial Planning Association of Massachusetts and host of a financial radio show on WXTK 95.1. He will be hosting a live Boston.com chat on Friday, Dec. 21 at 1 p.m.

With only 17 days until next year, the potential realities of the “fiscal cliff” are coming more clearly into focus. The bottom line, should we actually land in next year with no deal to avert the fiscal cliff, is a jump in taxes for many and reduction in the rate of government spending.

The prospective divergent implications on the US economy are pronounced. If we go over the cliff and there is no subsequent deal, a recession is expected by the Congressional Budget Office and many economists, resulting in an estimated 2% to 3% decline in the economy. If a deal comes out of Washington, many economists expect 1% to 2% economic growth. This has a meaningful impact for jobs, income, growth of wealth, and government revenues.

Given the uncertainty of whether there will be a compromise from Washington within the next couple of weeks, what’s an investor to do?

Cliff Proof Planning:
- First, don’t lose your head about the whole thing. Keep working, keep saving, keep investing. The best way to create wealth over time is to spend less than you earn, and invest for the long-term. Keep contributing to retirement plans or some manner of systematic investment, dollar-cost-averaging monthly and using any potential market declines as a buying opportunity.

- Plan for some short-term uncertainties by maintaining a sufficient amount of cash for emergency spending, and so you won’t need to sell securities at inopportune times. By keeping these reserves, you can allow yourself to ride out the bumps with the rest of your diversified portfolio.

- Revisit your estate plan in 2013 – estate tax rates and thresholds will likely change.

- Year-end Tax Planning this year is turned upside-down. Because of anticipated higher tax rates, realize long-term capital gains this year, rather than next year when there are higher rates. Save capital losses for next year, but if there are many, offset gains with losses and carry forward losses for future use.

- Contribute to a Roth IRA instead of a taking a tax deduction in 2012 for a contribution to a Traditional IRA. This can be done in 2013 prior to tax filing in April.

- Whether to convert an IRA to a Roth IRA is more complex and subject to various considerations. Primary considerations are: do you expect to be paying a lower tax rate now while earning or later in retirement? If the answer is now, then convert to a Roth IRA. Be sure to have cash on hand to pay the taxes caused by the Roth IRA Conversion. Check with a qualified tax advisor for the best tax tips.

- Do charitable giving. Because we don’t know what, if any, limitations to deductions may come with a deal, it seems reasonable to make charitable contributions sooner rather than later, particularly for the wealthy.

- Portfolio design revisions – Consider where you hold which investments. For example, it may make sense to hold income generating assets (dividend paying stocks, corporate bonds, etc.) in your retirement accounts, so that income is not taxed unless withdrawn. Conversely, focus on growth stocks, not dividend stocks, in taxable investment accounts. Tax-free municipal bonds may take on greater appeal for those in higher tax brackets.

- Tax Deferral will become more attractive for those in their peak earning years. Life insurance and annuity products can have higher costs and the potential for long surrender charges, so use of such products should be deliberate and well informed, however, these could be useful tools to postponing or even potentially avoiding some taxation.

Are markets poised for a tumble? It seems likely that uncertainty caused by Washington’s dysfunction may result in a temporary slowdown in the economy, but it is important to keep in mind the long view. Will companies continue to be profitable, and will market prices recognize that profitability? The likely answer is “yes.” Eventually, investors will benefit by taking risk. How long before they are compensated for those risks can vary, but as we look out several years, it certainly seems likely that taking risk will be rewarded, particularly with ownership of equities. It’s okay to be a bit tactical on the edges right now, but don’t just run scared.

With only a couple weeks remaining in the year, there is much to consider with your investments and planning. Take a little time now, the long-term results could pay dividends for years.

By John Napolitano, Financial Planning Association of Massachusetts

John Napolitano is president of the Financial Planning Association of Massachusetts and chief executive of US Wealth Management. He will be hosting a live Boston.com chat on Friday, Nov. 9 at 3 p.m.

We all eventually clean out a closet or basement, and find things that you forgot about and deem useful or valuable. From a financial perspective, the same process may also yield unexpected treasures. Living proof of this is your home state's unclaimed property list. In my home state of Massachusetts, it is estimated that one in 10 residents has unclaimed property.

John P. Napolitano, the chief executive of US Wealth Management, will take your money questions live Friday, Nov. 9 at 3 p.m.

Every month has its share of sales and seasonal buys. What should you go for in November?

Thinking of flying for the holiday season this year? You'll probably notice higher prices, if you are. But how can you get a cheaper flight? Here are some tips from George Hobica, founder of Airfare Watchdog. Some of his tips include setting up alerts for lower fares, looking at the early morning flights, and picking Thanksgiving Day (rather than the day before). What are your airfare tips?

Relay Rides is a car-share program that puts extra money in car owners' pockets. The program lets people rent out their cars for hours or days via the company's website. Relay Rides lets people rent cars for $7 an hour, $50 a day, or $250 a week. The whole transaction is done via Relay Rides, so people renting their cars don't need to be there to take the cash. What do you think? Is this a service you'd use?

Keeping up with all the shopping discounts on the web and in your favorite stores can be a challenge. But what if you had a mini personal shopper that sits in the palm of your hand to help remind you that your favorite pair of shoes is now discounted and just a click away? Buzz 60's Priya Desai takes a look at the apps and websites to help you save some cash.

Taxes and health care in the SAME entry?! I promise I'll make this quick and easy -- while saving you some cash in the process. While you're wading through all those forms during your annual health care open enrollment, make sure to look for information on flexible spending accounts. At their core, these accounts let your employer take money from your account before taxes that you can then put toward some medical costs, such as co-pays.

Think of it as a forced savings that is worth more than if you just put the money in a locked box under your bed.

People across the country are starting their annual human resources meetings to pick out health care plan options for next year. The task can be daunting. While you wade through the differences between an EPO and PPO, make sure to check out what your company offers for wellness incentives. You might be surprised.

This month employees across the country are going to start getting big'ol packets of information to narrow down a choice for health care. The decisions can be tough. The wrong checkbox could lead to you paying a lot more money in each paycheck for unnecessary benefits, or worse it could lead to you having to pay a lot during an emergency. The first question you have to ask during open enrollment: What type of plan to get?

Every month has its share of sales and seasonal buys. What should you go for in October?

The number of people taking on student loans keeps rising. Considering the economy, that fact alone shouldn't be surprising. But a new study released by the Pew Research Center finds that a staggering nearly 1 in 5 homes has student debt -- a number that won't be shrinking any time soon.

You can start collecting Social Security at 62, but it might not be the best idea. If you can hold out longer -- say, until you are 70 -- then you could have a much nicer regular income coming in.

By Christina Reinwald, Boston.com correspondent

How do you keep track of your financial information? Mint.com wants to help you improve it by importing your finances online. Stacy Rapacon, channel editor for personal finance website Kiplinger.com, said Mint.com offers the best overall online budgeting. What makes it even better? It’s free.

A 15 percent tip used to be a standard to leave for a waiter. Then came the stand 20 percent. Now a New York Post article is suggesting 25 percent is the new normal.

It's an emotionally charged topic, and there are a lot of financial topics to consider during a divorce. Here are a few including college expenses, moving costs, and life insurance.

Looking for other options than just the traditional checking or savings account? Here are some ideas to check out (that are safer than just stuffing all your money in a shoebox).

Women face some unique financial issues today. Certified Financial Planner Rick Fingerman, founder and president of Financial Planning Solutions Inc. in Newton, offers these five issues that can affect a successful financial life for women today. Fingerman will be live chatting about financial issues unique to women on Tuesday, Sept. 25 at 11 a.m.

1. Have a plan - If you fail to plan, you plan to fail
Take some time to learn how to plan for your life goals. Check websites, the library or sit down with a Certified Financial Planner and develop a financial plan. This is the first step. Like in any journey, you must know where you are starting from. A financial plan will not only tell you where you stand today but also if you will be able to get where you want to go. You might find out that you are on a good path to a comfortable retirement and meeting your other goals. If not, then you can learn some strategies to make the journey possible.

2. Funding a retirement plan
Many women step out of the workplace to raise a family. Not only does this reduce one's household income, but it also reduces how much money one is putting away in a company sponsored retirement plan. Consider contributing to a Roth or Traditional IRA if you are married. One is permitted to make contributions as a spouse even if one doesn't have any earned income. As long as the working spouse has income to satisfy the contribution requirements, this can be a great way to keep investing while out of the workforce.

3. Prepare to live for a long time
Statistically speaking, women out live men by 5 to 10 years. In fact, those that make it to 100, 85 percent are women. Living longer means needing money in retirement longer. Factor this in when doing your financial plan.

4. Caring for an aging parent
More times then not, women are the likely candidate to be the main caregiver. If possible, plan ahead when your parents are young enough to help ensure long term care can be provided to reduce this burden on oneself. Many times a woman is still raising her own children when this caregiver role is thrust upon them. This can be extremely stressful. Try to spread the cost, if possible. Ideally, when there is time to plan, long term care insurance can make a lot of sense as it provides care in the home as well as a long term care facility or assisted living.

5. Don't forget to take care of yourself!
Since you may very well outlive your spouse or partner, include a long-term care strategy in your own financial plan so there will be someone to help you if needed later in life. The best thing someone can do to prepare for this is to start as early as possible and have a good financial plan. If one is more in crisis mode with no time to plan, it's best to seek out an elder attorney or CFP that works in this area

Rick Fingerman is a Certified Financial Planner Professional, who has been helping individuals and business owners with strategic solutions to their estate, business and personal financial planning needs since 1989.

Rick is a member of the Financial Planning Association of MA (FPA), where he is a past president and chairman and holds the current position of liaison and financial coach with Dana Farber Cancer Institute. This initiative was developed to help patients with pro bono financial advice. Nearly 300 families have been helped to date.

Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, Member FINRA/SIPC Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Federally Registered Investment Advisor. Cambridge and Financial Planning Solutions, Inc. are not affilated.

Money in a 529 plan can obviously be used for things like tuition, fees and books but many people do not know that 529 plan money can also be used for room and board expenses and can even be used if the student lives in an off-campus apartment (assuming the student attends college on at least a half-time basis).

There are limits, so you can't use money in a 529 plan to rent a high end, luxury apartment. And, the limits can vary by school and by 529 program so it is important to check your plan's documents and you also need to contact the college and ask what figures it reports to the Department of Education for its cost of attendance. This information would be available from the the school's financial aid office.

Once living in the off campus apartment, you should save copies of the lease and the monthly rent checks. You should also save receipts for food purchases. Finally, you need to remember that 529 withdrawals must be timed to match expenses that occur in the calendar year (not the school year) so be sure to match the December checks with December 529 plan withdrawals and the January checks with the the next calendar year withdrawals.

In May of last year, I mentioned how the Social Security Administration (SSA) stopped automatically mailing paper benefits statements to those under the age of 60 (http://www.boston.com/business/personalfinance/managingyourmoney/archives/2011/05/social_security_9.html). At that time, if you were under age 60 and interested in receiving an estimate of your social security retirement benefits you had to specifically request a paper copy or obtain the information by using the SSA’s Benefit’s Estimator.

As of early last month, those benefits statements are available online through the SSA’s web site (http://ssa.gov/mystatement/). In order to access your statement you will need to create an account through the SSA web site using your personal information. According to the SSA, your account will provide you with information about the following:

- Estimates of the retirement and disability benefits you may receive;
- Estimates of benefits your family may get when you receive Social Security or die;
- A list of your lifetime earnings according to Social Security’s records;
- The estimated Social Security and Medicare taxes you’ve paid;
- Information about qualifying and signing up for Medicare;
- Things to consider for those age 55 and older who are thinking of retiring;
- General information about Social Security for everyone;
- The opportunity to apply online for retirement and disability benefits; and
- A printable version of your Social Security Statement.

The information from these statements - regardless of how to receive it - can be valuable in your financial planning or retirement planning process for a couple of reasons. First, it will provide you with an estimate of the retirement, disability, and survivor benefits that you are likely to receive. Secondly, it provides you with the earnings history that the SSA uses to calculate your benefits. It’s important to check (and correct, if necessary) your earnings history to ensure that you receive the benefits you are entitled to.

If a person dies owing a balance on their credit card, the credit card company will collect the debt from the cardholder's estate. If the cardholder does not have sufficient assets to cover the debt, the credit card company is generally out of luck. In some circumstances, the credit card company will approach relatives of the deceased and ask them to pay the debt but that practice is rare and the relative has no obligation to pay the outstanding debt.

However, if the account was opened as a joint account, the other account holder will be liable for the debt but this is only the case when the other person is a part of the credit card contract. If the other person using the card is merely an authorized user (but not a joint credit applicant) then they are not responsible for the debt. Along those lines, if you are an authorized user of a card and the account holder dies, the account will be closed and you will have no further access to the credit line. This may seem pretty straightforward but many people think that they can simply transfer the account to their own name. Instead, that person will have to apply (and qualify) for credit based on their own circumstances.

I have an IRA that was funded with only after-tax contributions. I did not receive a tax deduction for any of those contributions. Can I convert my IRA to a Roth IRA without incurring any taxes on the conversion?

The conversion would be free of any income taxes if the value of your account is less than the amount of non-deductible contributions that you made into the account. When you make a nondeductible contribution to an IRA, those contributions become part of your “basis”. In order for your conversion to be tax-free, your basis needs to be higher than the value of your account. If the value of your account exceeds your basis, the conversion will likely result in a tax on the amount above your basis because that amount would represent taxable earnings.

For example, let’s say that the total of the non-deductible contributions in your IRA is $10,000 (i.e., your basis) and the current value of the IRA is $12,000. The difference between the current value and the basis of your IRA is $2,000. This $2,000 represents earnings, which would be taxable if you were to convert the IRA to a Roth IRA. On the other hand, if the current value of the IRA is $9,000, your $10,000 basis would exceed the value of your account by $1,000. This difference would not be taxable because you lost money in your IRA.