Yesterday President Obama signed the Small Business Jobs Act of 2010 into law, providing access to loans and tax cuts for small businesses to encourage growth. While many of these measures are aimed at manufacturing companies, there are some that give even the smallest Internet-based startup or freelancer a break on their next tax return:
- Increase in amount allowed as deduction for startup expenditures in 2010 from $5,000 to $10,000. These are expenses incurred while you are setting up or researching a new business and may include the cost of advertising, travel, market research or training employees prior to opening the business.
- Deduction for health insurance costs in computing self-employment taxes in 2010. If you are a member of a LLC, a freelancer who fills out a Schedule C for your tax return, or an employee of an S-Corporation who owns more than 2% of the company’s stock, you can claim the insurance you buy for yourself and your family on your tax return. (LLC and S-Corporations must pay for or reimburse the premiums in order for the individual to qualify for the deduction.)
- Removal of cellular telephones and similar telecommunications equipment from listed property. A listed property is something you buy for both for business and personal use, like your car or your camera. It’s not considered a business expense unless you have a paper trail to prove that you use it for work at least 50% of the time.Â Now’s the time to upgrade your smartphone.
This is especially good news for writers, graphic designers, marketing professionals and other independent contractors who make the same amount of money as they did working for a large company, but who now pay their own health benefits and the employer’s share of their taxes. For more information on the jobs bill, check out this video posted yesterday on the White House blog: