President Obama Will Sign the Small Business Jobs Act

Today, President Obama will sign the $42 billion Small Business Jobs Act. It will create a fund, run by the Treasury, that will send cheap capital to small banks. It will also eliminate capital gains taxes on qualifying small businesses, allow businesses to carry back losses to 5 years, increase the amount of capital expenditures that businesses can write off immediately, provide an option to front-load capital expenditure depreciation, and increase the deduction entrepreneurs can take on their start-up costs.

Treasury Fund: The thinking goes that community banks do most of the lending to small businesses. If those community banks have access to cheap capital, they will pass that on to small businesses in the community who want to grow (ie: add more employees).

Eliminate Capital Gains: C corps with less than $50M of assets will not have to pain a capital gains tax on stocks purchased directly from the issuing company and held for 5 years.

5 Year Carry Back: If a business is profitable in one year and then turns a loss the following year, the business can file an amended tax return for the profitable year to recoup some of the taxes paid on profit. The new law extends the carry back period to 5 years.

Write off Capital Expenditures NOW: Section 179 of the tax code allows businesses to write off capital expenditures immediately. This bill extends the benefit through 2011 and increases the maximum to $500,000.

Bonus Depreciate Extension: Businesses can front-load a capital depreciation schedule to write-off 50% of qualifying property that is put in service in 2010.

Deduct Start-up Expenses: The amount that entrepreneurs can deduct for start-up expenses is increasing to $10,000.

Meta-Franchise Consulting is not sharing our political views about this bill. The goal of this post is to educate our readers about the bill. Our hope is that the bill will allow those who want to become a franchisee, but have been waiting on the sidelines, to jump in the ring. We are ready to help you realize your dream of business ownership.