October 1, 2010 12:00 am

Small Business Jobs Act Becomes Law

On September 27, 2010, the president signed into law the Small Business Jobs Act of 2010. The act contains $12 billion in tax cuts for businesses, small and large.

Key tax provisions include:

  • A deduction for self-employment tax purposes for medical premiums of self-employed individuals, saving them a little more than 15% of the tax that would otherwise have been due on the premium amount
  • Removal of cellular phones from “listed property” so that record keeping is simplified
  • Doubling of the first-year (Section 179) deduction to $500,000 for 2010 and 2011. This deduction applies to qualified leasehold, restaurant, and retail improvements up to $250,000
  • Extending 50% bonus depreciation for 2010 (which means a higher write-off for new business car, light truck, and van purchases this year)
  • Doubling the immediate write-off for start-up costs to $10,000
  • 100% exclusion for gain from the sale of qualified small business stock of a C corporation held at least five years for stock purchased after September 27, 2010, and before January 1, 2011
  • Five-year carryback of the general business credit for small businesses

To help pay for the tax cuts there is a new reporting requirement for those who own rental property. They must report payments of $600 or more in the year to service providers, such as plumbers, painters, and accountants.

Source: H.R. 5297

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Tax Glossary

Archer Medical Savings Account (MSA)

A type of medical plan combining high deductible medical insurance protection with an IRA-type savings account fund to pay unreimbursed medical expenses.

More terms