The Small Business Jobs Act – Opportunities for Business Owners– A Common Sense Overview
Our Thoughts on the Small Business Jobs Act Signed into Law by President Obama on September 27, 2010.
In our capital starved business climate, the bill contains many business friendly provisions that could potentially provide much needed sources of capital from both SBA loans and banks, opportunities for increased expensing and tax deductions, and additional tax cuts and planning opportunities.
The highlights include:
- If you are a business and buy new equipment, you can immediately write off the first $500,000 of your investments;
- If you are short on working capital, billions of dollars of new and expanded SBA loan opportunities have been created;
- If you have maxed out your eligibility for an SBA loan, many loan programs have expanded the total dollar amounts that your business can receive;
- $30 Billion in lending capital will now be available to small banks with incentives to make loans to small businesses;
- If you are an eligible business with long-term investments in your business, you will be subject to zero capital gains taxes;
- As an entrepreneur, you can take a chance on a new idea and deduct the first $10,000 of your start-up costs;
- A handful of other tax planning opportunities regarding cell phone write offs, limitation on tax penalties, and a 5 year carry back of certain business credits.
We label the the new provisions as potential opportunities because of these concerns:
- With capital spending at a 35 year low, these measures may stimulate spending for certain businesses, but the bill fails to address concerns regarding increases in health care costs and personal and business income and payroll taxes. Many businesses are hesitant to make significant purchases or hire new employees until they have more confidence in the economy and a better defined picture of upcoming tax and health care costs. With these new taxes and costs possibly taking effect in January 2011, there has been an alarming lack of guidance.
- Many businesses may still not be eligible or attractive to a bank or SBA program. To qualify for an SBA loan, a business still must meet eligibility requirements and the business owner must provide a personal guaranty. A business may need the assistance of an outside consulting firm to improve financials, profit, and therefore their potential to secure necessary capital.
- How much benefit will be created by the new tax planning, increased expensing, and accelerated depreciation opportunities? How much more complexity can we add to the tax system? With most businesses not capitalizing on existing planning opportunities, are they really in a position to take advantage of the new tax laws. We see too many businesses that aren’t capitalizing on Research and Development Credits for improved processes or Cost Segregation for accelerating depreciation on new and existing commercial business property. Great opportunities for reducing taxes and increasing much needed business cash flow are lost every year by most businesses.
Call us with questions, or to make sure your business realizes the full benefit of new and existing tax planning opportunities.
The Business Wealth Preservation Group is a professional services firm dedicated to providing superior individualized and custom service to individuals and their businesses in the areas of asset protection, tax planning, exit strategies, and wealth building. Simply put – we want to educate you on all relevant opportunities to put more dollars into your pocket, your business and your future.