12 Things You Need to Know About New Small Business Jobs Act - New York Business Law — New York Business Law

12 Things You Need to Know About New Small Business Jobs Act

by Fred Abramson on September 27, 2010 · 1 comment

President Obama signed into law today the Small Business Jobs Act. If you are an entrepreneur or run a small business, there are a number of key provisions that can help.

  1. Successful SBA Recovery Loan Provisions will be extended. The extension of these provisions provides the capacity to support $14 billion in loans to small businesses. That’s a big wade of cash which your business may be able to tap into.
  2. Maximum Loan Size for The Largest SBA Programs will be more than doubled.  This could help to provide greater access to working capital loans that small businesses use to purchase new inventory and take on their next order, which could help small business owners  create new jobs.
  3. A New $30 Billion Small Business Lending Fund. I am really interested to see how this is going to work. Currently, many small businesses are having difficulty obtaining access to capital because banks have cut off their credit. This provision would provide incentives to small banks to lend to small businesses.
  4. An Initiative to Strengthen Innovative State Small Business Programs – Supporting Over $15 Billion in Lending.  I am not sure how this will play out.
  5. Eight New Small Business Tax Cuts – Effective Today:
  • Zero Taxes on Capital Gains from Key Small Business Investments.
  • Extension and Expansion of Small Businesses’ Ability to Immediately Expense Capital Investments.
  • Extension of 50% Bonus Depreciation.
  • A New Deduction of Health Insurance Costs for Self-Employed. This is huge for self-employed individuals.  If you are self-employed, you can get a deduction for the cost of health insurance for yourself and your family members in calculating your self-employment taxes.
  • Simply deduction for cellphone bills. You can now deduct the full cost of your cellphone without providing documentation about each and every phone call.
  • An Increase in the Deduction for Entrepreneurs’ Start-Up Expenses. Entrepreneurs can deduct from their taxes for this year from $5,000 to $10,000 (with a phase-out threshold of $60,000) in expenditures.
  • Limitations on Penalties for Errors in Tax Reporting That Disproportionately Affect Small Business. If your business get audited, this should help.

What do you think of this bill? What more (or less) do you think the government should do to help small businesses.

The Law Office of Frederic R. Abramson represents small businesses in New York State.

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  • Fred Farkash

    I think this bill is a good start – but is probably not stimulative enough to get the economic engine chugging along again.

    There is also a provision in the law that allows 401(k)/403(b)/governmental 457(b) plans to allow an in-plan conversion to designated Roth contribution accounts. This will provide those employed by employers nimble enough to implement it by year end with the ability to convert their work based retirement plans into Roth accounts at current tax rates (which are set to increase after 12/31/10 if congress doesn’t act to extend the Bush tax cuts soon), or spread the tax over 2011 and 2012. If you think your income tax bracket may actually go up in retirement, converting to Roth may be worth considering – so talk to your accountant and/or financial advisor about it.

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