The forthcoming $30 billion in small business loan dollars may have most people talking about the just-signed small business stimulus bill. But the six tax changes listed below will leave Finance doing the heavy lifting.
The new Small Business Jobs and Credit Act of 2010 was signed into law last week and impacts companies of every size.
But your company will have to move fast to take advantage – the changes became effective immediately. And some of the breaks are only good for the remainder of the year.
Here’s a rundown of six key tax changes so you’re ready should your company decide to take advantage of any (or all) of them:
1. More Section 179 expensing. If your company has any large purchases planned, it’ll want to pull the trigger this year or get them in next year’s budgets. For Tax Years 2010 and 2011, the limit will now be $500,000, instead of $250,000 and $25,000 respectively. (The phaseout won’t start until purchases exceed $2 million.)
2. More property that counts (at a smaller cap). If leasehold improvements, restaurant or retail-improvements are on your organization’s list of upcoming initiatives, you can expense up to $250,000 of it.
3. A (brief) extension of bonus depreciation. All businesses (even those that don’t qualify for the Section 179 break) can recover the costs of qualifying depreciable property they buy in the remainder of 2010 more quickly by immediately deducting 50% of the cost.
4. A biz-tax carryback. Certain small businesses can “carry back” their general business credits to offset five years of taxes while also allowing these credits to offset the Alternative Minimum Tax.
5. Capital gains relief. Never mind the 75% exclusion of capital gains on key small business investments. The new law eliminates all capital gains taxes on these investments if held for five years.
6. Fewer substantiation headaches on key telecom purchases. You will be delighted to know cell phones were removed from the definition of “listed property” subject to tighter substantiation requirements and special depreciation rules. That should make your job a lot easier.
Info: For the full text of the law, click
