Highlights of Small Business Jobs Act 2010
HR 5297 signed on 9/27/2010
1) Bonus depreciation extended to 12/31/2010. Bonus depreciation is 50% depreciation on new equipment acquired. No taxable income or equipment total restrictions
2) Section 179 expensing up to $250,000 thru 12/31/2011. Was scheduled to revert back to $125,000.
3) Auto depreciation for new passenger cars now up to $11,060 for 2010.
4) S corp built in gain period for conversion of C corp to S corps is shortened to 5 years from 7 and previously was 10 years
5) Cell phone and other personal communication devices no longer listed property and subject to strict documentation
6) Carryback period of small business tax credits can go back 5 years and for eligible businesses can offset AMT
7) Qualified small business stock is now 100% capital gain exclusion for stock acquired after 9/27/2010 and before 1/1/2011
8) Startup expense deduction increased to $10,000 and increase total phase-out limit to $60,000
9) Self employed health insurance premiums/costs can not offset self employment tax starting after 1/1/2010.
10) 1099’s required for rental payments of $600 after 12/31/2010
11) Retirement plan rollovers and Roth IRA conversations are extended for 2 years
There are some other provisions that I left off, just tried to hit the highlights. Couple significant things left off:
1) R&D tax credit not extended , still expired as of 1/1/2010. It’s funny since they did pass the business tax credit carryback and utilization against AMT.
2) Bush tax cuts of capital gain (15%); top tax rate (36%); dividend tax(15%) still not passed
3) 1099 reporting of all payments of $600 not yet repealed