The much awaited and the much needed American Recovery and Reinvestment Act, the Economic Stimulus Bill was signed by President Barak Obama on February 18, 2009.It created history in United States because it is the country's largest legislation in history and aimed at rejuvenating the ailing economy by providing stimulus to different sectors. Along with other provisions, this stimulus bill also contains provisions for small business sectors. The importance of Small Businesses in the country is that they provide employment to more than 40% of Americans.
Various sectors and a wide range of individuals have suffered the wrath of this ailing economy as the American economy is facing its worst days since the Great Depression of 1929. Along with the big business houses, the poor economic conditions have also greatly affected the small businesses. The various proposals to save the economy are tax deduction, special depreciation deduction, miscellaneous tax cuts, job creation and small business administration benefits.
Tax deduction under section 169 can in some occasions write off certain qualified plant and equipment purchases in a calendar realist year for the small business units. Until last year this deduction was limited to only $ 128,000 and also could not be more than the income of the small business. Now the stimulus Bill will benefit the small businesses by increasing this deduction to $ 250,000 yearly beginning in 2008 tax year. However the type of equipments that a small business buys is important for receiving this deduction. It is not applicable for land, buildings and other improvements. It is only applicable for things like computers, vehicles, office equipments and like things.
Another provision in the stimulus bill that benefits small businesses is special depreciation deduction. Small businesses can apply for a special depreciation deduction for the year 2008.This will help them to purchase a land or property that cannot be included under the section 179 deduction during 2008 and can be able to depreciate 50% of its value during the financial year 2008 with the help of this provision. This will help them to utilize the remaining 50% of the value of that land or property for calculating the regular depreciation tax deduction.
Small business owners can also have certain tax cuts by showing miscellaneous expenses. The expenses for promotions directly related to a small business can be included in the miscellaneous expenditure. The small businesses can delay the payment of 3% withholding tax in goods and services to the government. Also the share holders of publicly owned small businesses who are holding the shares for more than five years can receive a special capital tax cut. The small businesses which employ workers who have been out of job for more than six months and also those students who left school six months back and are still unemployed, will receive special tax credits under this provision.
Under the Stimulus Package, the Small Business Administration will ensure that the small businesses get loans more easily and also offer incentives to lenders who will give the loan for small businesses. This ensures more capital flow into the market.
Small Business Grant Source:
Learn the application procedures, various funding sources for specific types of businesses and eligibility criteria for small business grants. You can find the most comprehensive information on availing of small business grants by visiting this online guide on grants here