- Tax Breaks: SBJCA creates two major tax breaks for small business owners-
- Health Insurance Premiums: For self-employed business owners or sole proprietors, a tax deduction is available for health insurance premiums you currently pay. It also lowers self-employment related taxes. The Act covers premiums paid for the owner, their spouse, and any dependents up to the age of 26.
- Start-up Costs: There is an extra $5,000 tax deduction for costs related to small business start-up. This moves the limit up to $10,000.
- Higher Limits on Loans: The Act launches the Small Business Lending Fund Program, which designates billions of dollars to local banks for the purpose of lending small business loans. Also, the Lending Fund Program increases the limit that the Small Business Association (SBA) can lend to small businesses. Finally, the act eliminates many of the fees associated with most SBA-approved loans.
- Various Section 179 Deductions and Expensing Provisions: Small business owners can now invest more in their company equipment and expense up to $500,000 (an increase from the previously allowed $250,000). Now certain items can be expensed such as real property, computer software, and even cell phones
If you are considering starting up a small business, or are currently operating one, you should consult with a lawyer to see how the Small Business Job and Credit Act of 2010 will affect your ventures. It is a good idea to have a lawyer go over the new law with you. They will be able to make sure you are following proper principles of accounting and business management. Also, a business attorney will be able to advise you on how you can benefit from SBJCA provisions.