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17 Small Business Tax Credits

  Sanjiv Gupta CPA  Published 
17 Small Business Tax Credits

President Barack Obama is all set to boost the country’s economic pillar; How? Well, surprising but yes he lent a patient hearing to the grudges and grievances of over a thousand small business entrepreneurs through the columns of Advise the Advisor and Winning the Future Small Business Forum this week.

 Several questions poured in. Some directly questioned Obama’s administrative policy regarding cuts on tax frills. Twitter found one Lindsmith asking Whitehouse about the 17 tax policies that Obama passed as law. This article contains a pertinent explanatory, direct from the mouths of the government’s official financial consultants. In this article, we explain the tax laws of President Obama pertaining to small business and what effect the change has had on it.

 Ever since Obama joined the government’s prestigious office in 2009 he put into effect 17 tax laws that promised tax-incise and increase of credits for all small business entrepreneurs.  The three key legislative acts that pronounce tax-cut terms are the American Recovery and Reinvestment Actthe HIRE Act and the Affordable care Act.

Each of the Acts covers as many as eight small business tax-cut variations that have had a significant impact on the small business sector. To name a few are:

  • Exempting 75% on capital gains (small business establishments)
  • Health insurance tax-credit for employees (small business establishments)
  • Tax-credit for newly recruited employees (Those that were unemployed for over 2 months)

 Again in September 2010 the President signed and passed the Small Business Jobs Act which contained another eight laws on tax-slash and tax-credit. The benefits of the Small Business Jobs Act are as follows:

  •  Extending small business expense limit to $500,000 (so far this is the highest amount granted)
  • Simplification of rules when applying for business phone usage deduction
  • Tax-exempt on medical costs for the self-employed
  • Greater tax-exempt for start-up businessmen
  • Expelling tax imposition on capital gains (small business establishments)

 In the same year winter, a tax bill was passed under the Obama Administration which furthered the benefits and stated that all businessmen, large and small, could use 100% of capital gains to propel new business investment plans. This plan was however limited to the next seasonal winter of 2011. Also, the period of tax-exempt on capital gains for all small business investments was extended until the end of 2012 and well the good news is that the president suggests that he is trying to turn this policy into a permanent one. This would mean to be a special incentive for the small business sector and could function as the much-required boost for the economy that is struggling under the current recessionary scenario.

 In fact, experts opinion that the attention paid to small business entrepreneurs is just one of the many ways that will help the government strengthen its position by securing the economic backbone of the country- small business establishments. Obama is, therefore, all keen to win the future with the flourish of small business centers and thus he is introducing these measures in the tax rules pertaining to the small business sector. Well, his actions are heartily acknowledged and supported as long as he keeps the government running with the conscience that the government is of the people by the people and for the people.

 In the list given below we enumerate Obama’s 17 small business tax-cuts:

 Tax-laws as granted by, HIRE Acts, the Affordable Care Act and the Recovery Act:

1. A New Small Business Health Care Tax Credit

2. A New Tax Credit for Hiring Unemployed Workers

3. Bonus Depreciation Tax Incentives to Support New Investment

4. 75% Exclusion of Small Business Capital Gains

5. Expansion of Limits on Small Business Expensing

6. Five-Year Carryback of Net Operating Losses

7. Reduction of the Built-In Gains Holding Period for Small Businesses from 10 to 7 Years to Allow Small Business Greater Flexibility in Their Investments   

8. Temporary Small Business Estimated Tax Payment Relief to Allow Small Businesses to Keep Needed Cash on Hand


 Tax-Laws as granted by the Small Business Jobs Act:

9. Zero Capital Gains Taxes on Key Investments in Small Businesses

10. The Highest Small Business Expensing Limit Ever– Up to $500,000

11. An Extension of 50% Bonus Depreciation

12. A New Deduction for Health Care Expenses for the Self-Employed

13. Tax Relief and Simplification for Cell Phone Deductions

14. An Increase in The Deduction for Entrepreneurs’ Start-Up Expenses

15. A Five-Year Carryback Of General Business Credits

16. Limitations on Penalties for Errors in Tax Reporting That Disproportionately Affect Small Business

And Tax-law as under the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act:

17. 100 Percent Expensing

How much tax can you save with so many tax credits? Well, you need to contact your CPA to find this answer.