SMALL BUSINESS JOBS ACT OF 2010

    As we approach the end of the year I would like to talk about some tax law changes that may be of benefit to your business.

On September 27, 2010 The Small Business Jobs Act of 2010 (SBJA) was enacted. It's purpose is to spur growth and help small businesses in particular.

One provision that may help self employed business owners is the Sect 2042: Deduction for health insurance costs in computing self-employment taxes in 2010. Generally small business owners may not deduct the cost of health insurance when computing self-employment tax. Under (SBJA) with specific limitations the business owner may deduct the cost of health insurance for themselves and their families when computing self-employment taxes.

Sect.2031: Increase in amount allowed as deduction for start-up expenditures in 2010 for anyone starting a new business they may be able to deduct up to 10,000 in startup expenses. However if the startup cost exceed 60,000 the deduction may be reduced dollar for dollar by the amount over 60,000. The remaining amount is amortized of 180 months.

Sect.2022: Additional first-year depreciation for 50% of the basis of certain qualified property. Generally, businesses allowed to depreciate capital assets over time, this will allow a business to take an additonal first year depreciation of 50%

Sect.2021: Increased expensing limitations for 2010 and 2011; certain real property treated as code section 179 property. This not only increases the amount of Sec 179 expense depreciation a business may take but also allows for certain real property to be expensed as well.

In my next blog I will cover some of the other provisions of the tax act.

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