Image by Biggunben via Flickr

By Stacie Clifford Kitts, CPA

Well loyal readers, I am finally getting around to outlining the tax aspects of the Small Business Jobs Act.   Because I am a visual interactive learner, writing and organizing helps me to retain information. I guess you could say that blogging is like a study technique for me.  Too bad it doesn’t qualify for continuing education credit.  *sigh* oh well.

Fixed asset expensing – Section 179

• Maximum expense amount $500,000
• Phase out amount $2 million for years 2010 and 2011

Fixed asset bonus depreciation – Section 168(k)

• Extended through 2010
• Percentage of completion method can be taken into account for qualified property

Qualified small business stock – Section 1202

• Increases the gain exclusion from the sale or exchange of qualified small business stock to 100%
• Applies to eligible stock acquired after the enactment date and before Jan 1, 2011

Business credits – Section 38

• Is extended to five years
• Can be used to offset regular and alternative minimum tax
• Tax years beginning after 2009

Built in gains – Section 1374

• Recognition period for computing built in gains tax is the five year period beginning with the first day of the fist tax year for which the corporation was an S Corporation.

Health insurance for self employed individuals

• (This is a particularly good one) For tax years ending after 2009, self employed individuals can deduct health insurance for themselves, their spouses, dependents and children under 27 against net earnings for self-employment for purposes of calculating their SECA taxes ( SECA is equivalent to a workers FICA tax)

Startup expenses – Section 195

• Expenses increased to $10,000 for years beginning in 2010 and 2011
• Limitation on deduction is increased to $60,000
• Calculated by the lessor of 1) the amount of the startup expense or 2) 10,000, reduced (but not below zero) by the amount by which the startup expenditures exceed $60,000

Reportable and listed transactions – penalty under section 6707A

• The penalty for failure to disclose a reportable transaction is limited to 75% of the decrease in tax resulting from the transactions.
• Max penalty for a natural person is $10,000
• Penalty for a non-natural person is $50,000 (so like a business or trust or such)
• Listed transactions maximum penalty will be $100,000 for a natural person
• Listed transactions maximum penalty will be $200,000 for non-natural person\
• Minimum penalty
  • $5000 Natural person
  • $10,000 Non-natural person

Listed property – Section 280A

• no longer includes cell phone.

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• Obama signs the Small Business Jobs Act (mnn.com)
• President Obama Signs Small Business Jobs Act – Learn What’s In It (whitehouse.gov)
• Passage of Small Business Jobs Act a Huge Win (prnewswire.com)
• Brandon Edwards: Small Business Jobs Act: Real Value to Small Manufacturers (huffingtonpost.com)
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• Kristie Arslan: Senate Wakes Up and Pays Attention to Small Business [Commentary] (huffingtonpost.com)