.

SmartMoney Blogs

The Tax Blog
The latest news, insights and tips about taxes

Big-Impact Small Business Tax Breaks

Many of the best business-related tax breaks were in the Small Business Jobs Act passed this fall but small — and mid-size — businesses also retained some benefits in the tax deal signed last week.

But some of these breaks will benefit truly small businesses more than others — and some will extend to what most of us consider mid-size or even larger companies. That’s because there are really two definitions of small business — the government’s more generous definition and the tighter definition most small business owners and watchers adopt.

First, there’s the government’s definition: A business with sales of $7 – $25 million, with up to 500 or 1,000 employees.

Second, there’s the more common definition that fits the average small firm: A business with sales of well under $2 million with up to 10 employees or freelancers.

Thinking in terms of average small business owner (definition #2), here are some tax breaks that have impact.

For starters, Section 179 depreciation is now so high ($500,000) that the average small business can write off all their asset and equipment purchases the year they buy them. That’s a plus because you can get an instant tax benefit from all your purchases (made after Sept. 8 of this year and before Jan. 1, 2012), instead of spreading the depreciation over three, five or seven years.

What’s more, certain real estate improvements, restaurant and retail purchases now qualify for the quicker write-off, too; in the past you could only write them off over five and seven years, or longer.

But a word of warning: if the assets are sold or discarded (think electronics) in less than their useful life, the Section 179 break must be recaptured. For instance, laptop computers seem to need updating or replacement within two to three years. But their lifespan for tax purposes is actually five years.

The second big break: If you started a business in 2010, you might be in luck. The one-time write off of start up costs double — for the 2010 tax year only — to $10,000.

Third: Health insurance may be deducted by small businesses. Normally, this is a deduction on the first page of the Form 1040. Just for 2010, you can reduce self-employment taxes and overall income taxes. For a small business-owner paying $800 per month for family coverage, that directly reduces self-employment taxes by at least $1,500.

Fourth (and this is a big headache reliever): Put away that call log! Cellphones were removed from listed property requirements. Small business taxpayers will no longer need to keep detailed logs of business vs. personal use for a cell phone.

Fifth: The extension of the COBRA credit to May 2010. This allowed many small businesses forced to lay off staff to help former staff keep  health insurance for a while longer. The IRS subsidized 65% of the premiums for employers, allowing former employees to pay just 35%.

Readers, if you own a small business, which of these breaks will benefit you most?

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 8)

View all Comments »
    • By WebOsPublisher

      Make your desktop icons Transparent! | technofreak
      skip to main |
      skip to sidebar
      technofreak
      articles and resources for technology students!
      home
      education
      techno tips
      contact
      Tuesday, July 6, 2010
      Make your desktop icons Transparent!
      Hi frnds, today i am going to tell you a fun trick and with the help of this trick you can change the appearance of your desktop icons. You can make them Transparent. This trick is just to introduce you with some of the nice features of your Windows xp so that you can explore many hidden functionalities of your operating system which is generally not known to many people.
      So here’s the Trick-
      Go to Control Panel > System > Advanced > Performance area > Settings button Visual Effects tab “Use drop shadows for icon labels on the Desktop”
      Filed under:
      windows,
      windows trick,
      windows xp
      Twitter
      Facebook
      Digg
      Delicious
      Stumble
      0
      comments:
      Post a Comment
      Post your valuable comment
      Newer Post »
      « Older Post
      Subscribe to:
      Post Comments (Atom)
      Ads4Good
      Ads4Good – Engaging people in the act of Giving.
      Support your favorite cause through your blog or website.
      blog archive
      ► 
      2011
      (3)
      ► 
      October
      (1)
      ► 
      Oct 06
      (1)
      ► 
      July
      (2)
      ► 
      Jul 06
      (1)
      ► 
      Jul 01
      (1)
      ▼ 
      2010
      (56)
      ► 
      November
      (2)
      ► 
      Nov 26
      (1)
      ► 
      Nov 17
      (1)
      ► 
      October
      (1)
      ► 
      Oct 04
      (1)
      ► 
      September
      (2)
      ► 
      Sep 23
      (1)
      ► 
      Sep 21
      (1)
      ▼ 
      July
      (6)
      ► 
      Jul 21
      (1)
      ► 
      Jul 19
      (1)
      ► 
      Jul 18
      (1)
      ► 
      Jul 13
      (1)
      ▼ 
      Jul 06
      (1)
      Make your desktop icons Transparent!
      ► 
      Jul 04
      (1)
      ► 
      June
      (11)
      ► 
      Jun 27
      (1)
      ► 
      Jun 25
      (1)
      ► 
      Jun 23
      (1)
      ► 
      Jun 19
      (1)
      ► 
      Jun 17
      (1)
      ► 
      Jun 16
      (1)
      ► 
      Jun 15
      (1)
      ► 
      Jun 12
      (1)
      ► 
      Jun 11
      (1)
      ► 
      Jun 06
      (1)
      ► 
      Jun 02
      (1)
      ► 
      May
      (5)
      ► 
      May 31
      (2)
      ► 
      May 20
      (2)
      ► 
      May 12
      (1)
      ► 
      April
      (1)
      ► 
      Apr 21
      (1)
      ► 
      March
      (4)
      ► 
      Mar 26
      (1)
      ► 
      Mar 23
      (1)
      ► 
      Mar 17
      (1)
      ► 
      Mar 08
      (1)
      ► 
      February
      (15)
      ► 
      Feb 28
      (1)
      ► 
      Feb 26
      (3)
      ► 
      Feb 25
      (4)
      ► 
      Feb 16
      (4)
      ► 
      Feb 15
      (1)
      ► 
      Feb 07
      (1)
      ► 
      Feb 01
      (1)
      ► 
      January
      (9)
      ► 
      Jan 26
      (4)
      ► 
      Jan 25
      (2)
      ► 
      Jan 15
      (3)
      ► 
      2009
      (27)
      ► 
      November
      (27)
      ► 
      Nov 15
      (1)
      ► 
      Nov 14
      (1)
      ► 
      Nov 12
      (25)
      featured posts
      function random_posts(json)a=location.href;y=a.indexOf(‘?m=0′);for(var i=0;i]*’);document.write(”);document.write(”+rdp_posttitle+”);if(rdp_info==’yes’)document.write(”+rdp_postdate.substring(8,10)+’/’+rdp_postdate.substring(5,7)+’/’+rdp_postdate.substring(0,4)+’ – ‘+rdp_commentsNum)+”document.write(”)};getvalue();for(var i=0;i
      Popular Posts
      B.Tech. Syllabus (MDU, Rohtak)
      Unblock Blocked Pen drive in School, College or Office!
      Add image to Orkut Background or Create a new theme
      Disable the right click functionality on desktop in Windows xp!
      Recover password
      Subscribe
      Enter your email address:Delivered by FeedBurner
      Labels
      Airtel tricks
      cheats
      data recovery
      earn online
      games
      genuine key
      hack password
      hide ip
      increase internet speed
      internet speed
      ip address
      Microsoft
      Office 2003
      online money
      orkut
      orkut tricks
      pc password
      PC tips
      recover password
      remove virus
      serial key
      windows
      windows firewall
      windows trick
      windows xp
      gapi.load(“iframes-styles-bubble”, function()
      if (window.iframes && iframes.open)
      iframes.open(
      ‘//blogger.com/navbar.g?targetBlogID\758302479034336904553\46blogName\75technofreak\46publishMode\75PUBLISH_MODE_HOSTED\46navbarType\75LIGHT\46layoutType\75LAYOUTS\46searchRoot\75technofreak.co.in/search\46blogLocale\75en\46v752\46homepageUrl\75technofreak.co.in/\46targetPostID756099421800097844555\46blogPostOrPageUrl\75technofreak.co.in/2010/07/make-your-desktop-icons-transparent.html\46vt\75-8134915318341225774′,

      container: “navbar-iframe-container”,
      id: “navbar-iframe”
      ,

      );

      );
      Visitors!
       
      Copyright © technofreak. All rights reserved.

    • Yeah, I’m thinking the rise in cosmnuer spending was due to tax returns as well. I’m thinking cosmnuer spending will crater yet again come this Summer when most tax returns have been spent.Face it: we’re in the beginning of our very own ‘Lost Decade’.

    • Make a list of what you want to donate. Take phoots.Visit goodwill and find out what furniture sells for.Be realistic that it isn’t worth very much.If the total is more than $5000, you need an appraisal.Then at tax time, you file schedule A, attaching form 8283.If your schedule A is *more* that your standard deduction, you take the higher amount. The amount over your standard deduction times your tax rate (you are in the 15% bracket) is the amount by which your income taxes would drop. If you don’t normally itemize, and had $6000 to itemize, you’d have to pay for an appraisal, just to get $85 back.Personally at that level I’d either hold a garage sale or donate with no intent of getting a tax benefit.References :

    • I found a company that can help with business questions. http://www.americastaxnetwork.com. They offer up to two hours of consultation for $99.00. The person they put you in touch with is an Enrolled Agent that was a FORMER employee of the IRS. They will discuss and answer any questions during that time. Hope this helps..

    • Question:
      Can you write off business expenses with capital gains? I’ve made some money with stocks and I want to start a business, but I’d like to know if I can deduct the start-up cost from my taxes on capital gains. Thanks, anyone who can help.

About The Tax Blog

  • The Tax Blog brings together a team of award-winning tax journalists from the Dow Jones network and around the web to examine the tax issues, changes and legislation that affect families, investors and small business owners. Our contributors include Tax Report columnist Laura Saunders (WSJ), Tax Guy columnist Bill Bischoff and senior reporter Jilian Mincer (SmartMoney.com), retirement-focused reporter Anne Tergesen (WSJ), wealth management writer Arden Dale (Dow Jones Newswires), TaxWatch columnist Eva Rosenberg and personal finance reporter Andrea Coombes (MarketWatch), and reporter Alyssa Abkowitz (SmartMoney). They’ll provide the latest news and insight, mine the tax code for tips and loopholes, and answer your questions about tricky tax situations. Contact the The Tax Blog with ideas, suggestions or tax questions at thetaxblog@dowjones.com.

.