Small Business May Finally Get a Tax Break

Legislation introduced by introduced this week by Sens. Baucus, D-Mont., and Landrieu D-La., and with a strong assist by Sens. Grassley, R-Iowa, and Snowe, R-Maine if passed, will help ease the tax burdens on small business owners.  The bill is the Small Business Jobs Tax Relief Act; it passed the House and is currently in the Senate.

As reported by Dean Zerbe in Forbes earlier this week, the bill has several provisions that can provide small businesses with needed tax relief. Namely:

• Carry back unused business credits five years (instead of one year, as currently).  Zerbe says this could mean money in  your pocket if you file an amended return.
• General business credits will not be affected by Alternative Minimum Tax eligibility. These tax credits include the Work Opportunity Tax Credit, and will spell relief for many small business owners.
• Increased property accelerated depreciation under Section 179. Currently Section 179 expenses can be deducted in full in one year, up to $250,000 with a phase-out at $800,000. The bill would increase the thresholds to $500,000 and the phase-out to $2 million for tax years beginning in 2010 and 2011.
• Continues Bonus Depreciation. The bill continues the 50% bonus depreciation deduction through 2010.
• Health Benefit Deduction. The bill allows business owners to deduct the cost of health insurance for themselves and their families from their self-employment tax, a big help to decrease health costs.
• Increased Lending Funds. The most important part of this legislation might be increased funds for lending, including federal incentives, state small-business credit programs,  and expanded SBA lending.

I will continue to follow this legislation and let you know if/when it passes the Senate.

More Information on the Small Business Jobs Tax Relief Act from AccountingWeb.