Small Business Tax Breaks in the Stimulus Package

[Joanne98]

The American Recovery and Reinvestment Act of 2009 contains numerous tax provisions aimed at small businesses.

Bonus depreciation: IRC section 168(k) is amended to extend the 50% first-year bonus depreciation through 2009 (through 2010 for certain transportation property and aircraft).

The election to accelerate AMT and research credits in lieu of taking the bonus depreciation (which had been introduced last year by the Housing Assistance Tax Act, P.L. 110-289) is also extended to qualifying property placed in service through 2009. Special rules apply to taxpayers who had already made this election for property placed in service in 2008.

Section 179 expensing: The increase in the section 179 expensing amount to $250,000 and the increase in the phaseout threshold to $800,000 are both extended through 2009. The amounts had originally been temporarily increased (for 2008) by the Economic Stimulus Act of 2008, P.L. 110-185.

Carryback of small business NOLs: Eligible small businesses are allowed to carry their 2008 net operating losses (NOLs) back for five years (section 172(b)(1)(H)). An eligible small business is one that has average gross receipts of $15 million or less (using the gross receipts test from section 448(c)). The act gives Treasury authority to publish anti-abuse rules relating to this provision.

Small business estimated taxes: Qualified individuals are allowed (for 2009 only) to make estimated tax payments that equal only 90% of their preceding tax year liability instead of 100% (under section 6654(d)(1)). To be a qualified individual, the taxpayer must have adjusted gross income (AGI) of less than $500,000 and more than 50% of the individual’s gross income must come from a small business (a business with an average of fewer than 500 employees).

Work opportunity tax credit: The act creates two new targeted groups for the work opportunity tax credit, “disconnected youth” and unemployed veterans (section 51(d)(14)). Employers who hire members of these groups during 2009 or 2010 may be eligible to take the credit.

Continued>>>
http://www.journalofaccountancy.com/Web/SmallBusinessTaxBreaksinStimulusBill.htm

[ixion]

1. what the hell is wrong with a blanket credit?

I mean, why does everything have to be couched in legalese defining narrow corridors for small business to get tax breaks.

Why not just say any small business (the current legal definition of small business) gets a temporary tax break of 'n'.

This is my problem in general with our Congress and they way the make laws.

[Joanne98]

2. True. I thought since small business is the engine of the economy that they

should just cancel their taxes for three years. But the GOP wanted tax cuts for the rich so I guess they had to compromise.

[2Design]

3. I think if you do not narrowly define things then the repubs just take advantage

It is like they look for ways around everything - take for instance palin and getting per diem while living at home - now to me that should be a absolute no and fraud but instead the only thing going to happen is her paying taxes on it - go figure - that is so fraud and should be stopped - her state is wasting a lot of money on her and getting very little back for themselves except what she can hold up the federal government for - she has taken a lot of federal funds and works the system

[Coyote_Bandit]

4. I have yet to see any mention of

stimulus funding to be used for SBA loans for new business creation.

Lots of those unemployed folks are going to be unable to find new jobs and will want to start some sort of small business.

This is a tragic lost opportunity

[Abq_Sarah]

5. There is not a single thing

In this bill that will help my business.