How will the Recovery and Reinvestment Act of 2009 sitmulate your business?
Love it or hate it- you can no longer deny it.
Recovery and Reinvestment Act of 2009 was signed into law this week.
So what tax benefits can you expect to see for your business?
I found this comprehensive breakdown at accountingweb.com:
Loss carrybacks expanded. Businesses with gross receipts under $15 million that experience losses can now carry those losses back for five years instead of two. This provision could result in a refund.
Estimated tax relief. For certain small businesses the requirement to make estimated tax payments is reduced for 2009.
Transit benefits. The new bill equalizes the tax-free benefits employers can provide to employees for transit and parking. Beginning in March 2009, parking and transit benefits are both set at $230 per month. This change is effective through 2010.
New hire tax credit. The new law includes a tax credit equal to 40 percent of the first $6,000 of wages paid to employees who are unemployed recent veterans or “disconnected youth” (defined as individuals between the ages of 16 and 25 who have not been regularly employed or attending school in the past six months and who are not readily employable due to a lack of certain basic skills).
Section 179 depreciation expanded. Businesses were able to deduct up to $250,000 on the purchase of business equipment for 2008. Beginning in January 2009, that credit was reduced to $133,000, but the stimulus act raises it again to $250,000. In addition, the stimulus act reinstates bonus depreciation for purchases of eligible equipment.
Business capital gains relief. Small business owners can exclude 75% of the profits from capital gains, provided they have owned their businesses for at least five years.
And just in case you’re the kind of person who likes to read the fine print, you can search for and read the complete text of H.R. 1, the American Recovery and Reinvestment Act of 2009 online here.
- “Leadership is a learned process” – an online leadership evaluation test using the DiSC methodology
- The Urban-Brookings Tax Policy Center – Tax Stimulus Report Card
As a young start-up company (Elevatid Web Design), I have purchased a lot of software and hardware equipment. So Section 179 will be great for my tax returns but…what’s most important is that the free market will get back to its core principles. Bailing out the mismanaged corporate giants hurts that process.
Fear is gripping America. “Hope and change” is great for those waiting for Government handouts. But to the go-getters, I want to MAKE it through hard work. Why I started a business in the biggest economic crisis is still a mystery to me. I will not allow the depressing news deter me. Unfortunately, I rely on companies to spend their marketing dollars and usually that is what is cut first.
America…we need to take back our country. Throw the liars and cheaters in jail.
Thanks for the great comment Michael.
I think it’s safe to say that there is an air on entitlement across the board in this country – both on Main Street & on Wall Street.
What ever happened to good old fashioned responsibility and accountability? Until we, as a nation, can regain those values at home, work and from our leaders, I think we’re going to remain in trouble.
Russell, WE ARE BAILING OUT the so-called leaders. Deception in on Capitol Hill, Wall Street and most Americans become victims of the powerful minority.
I really could see this coming. I watched a great documentary on Enron. I truly saw the face of evil.
Most of my great friends are police officers. Now, they deal a lot with criminals. Usually they come from poor neighborhoods, lack education and are under the influence of alcohol or worse. I have told them… the worst criminals are the ones up in penthouses, have millions of dollars, and still harm their fellow citizens. Their acts are usually far worse ( i.e. destroying life savings).