Monday, October 4, 2010

Changes in business tax laws for 2010

On September 27, President Obama signed into law H.R. 5297, the Small Business Lending Funding Act. The tax title of this bill, the Small Business Jobs Act of 2010 (the Act), includes a number of important tax provisions for businesses large and small, and changes for individuals as well. The following are some of the more notable provisions:

  • Doubles the §179 expensing limit to $500,000, phasing out at $2 million for tax years beginning in 2010 and 2011, and allows the expensing of up to $250,000 of leasehold, retail, and restaurant improvements.
  • Reinstates 50% bonus depreciation for qualifying property acquired and placed in service in 2010, and authorizes an increased first-year depreciation limit by $8,000 for passenger autos that are "qualified property."
  • Doubles the allowable tax deduction for start-up expenditures to $10,000.
  • Removes cell phones from the definition of listed property.
  • Allows self-employed individuals to deduct health insurance costs in paying their 2010 self-employment tax.
  • Allows small businesses to carry back general business tax credits to offset their taxes from the previous five years, and count those credits against their Alternative Minimum Tax (AMT) liability.

1 comment:

  1. I love that the Sect 179 is increasing. That's a nice plus for mid-sized businesses. And the higher start-up expense allowance is nice, too. That will help a lot of the little self-employed businesses that are starting up because of the poor economy-- I like to see those Schedule C taxpayers pick themselves up by their bootstraps and start their little independent businesses-- that's what I did four years ago and It was a great decision for me.