Small Business
The Small Business Jobs Act signed by President Obama late last month has several ABA supported proposals that will aid small businesses, including motorcoach operators. These proposals include:
* The law increases the maximum loan size for SBA loans. It raises the maximum size for Small Business Administration's two largest loan programs, increasing the maximum 7 (a) and 504 loans from $2 million to $5 million, and the maximum 504 manufacturing related loan from $4 million to $5.5 million. In addition, the law increases the maximum loan size for SBA Express loans from $350,000 to $1 million, providing greater access to working capital loans that small businesses use to purchase new inventory and take on their next order.
* The law establishes a new $30 billion Small Business Lending fund which provides capital to small banks with incentives to increase small business lending.
* The bill supports at least $15 billion in small business lending through a new State Small business Credit Initiative, strengthening state small business programs that leverage private sector lenders to extend additional credit.
New Tax Cuts
The Small Business Jobs Act provides eight new tax cuts for small businesses that go into effect immediately:
1. Zero taxes on Capital Gains from Key Small business investments. Under the previously passed Recovery Act 75 percent of capital gains on key small business investments this year were excluded from taxes. The Small Business Jobs Act temporarily puts in place for the rest of 2010 a provision that eliminates the capital gains tax on these investments if held for five years.
2. Extension and Expansion of Small businesses' ability to immediately expense capital investments. The bill increases for 2010 and 2011 the amount of investments that businesses would be eligible to immediately write off to $500,000, while raising the level of investments at which the write off phases out to $2 million.
3. Extension of the 50% Bonus Depreciation, the bill extends the provision for 50 percent bonus depreciation through 2010.
4. A new deduction of Health Insurance Costs for the Self employed, the bill allows for a deduction for the cost of health insurance for themselves and their family members.
5. Cell Phone deductions, the bill changes the rules so that the use of cell phones can be deducted without extra documentation.
6. The bill increases the amount of start up expenditures new business owners can deduct from their taxes for 2010 from $5000 to $10,000.
7. The bill allows certain small businesses to "carry back" their general business credits to offset five years of taxes and also allows these credits to offset the Alternative Minimum Tax (AMT).
8. The bill changes the penalty for failing to report certain tax transactions from a fixed dollar amount to a percentage of the tax benefits from the transaction.
