Allows for small businesses to carry back general business tax credits to offset the tax burden from the previous five years. Small businesses also will be able to use these credits against the Alternative Minimum Tax.
Boosts the tax deduction for start-up expenses to $10,000, for small business owners who spend $60,000 or less to start their business.
Allows cell phone costs to be deducted or depreciated like other business property.
Allows business owners to deduct the cost of health insurance incurred during 2010 for themselves and their family members in the calculation of their 2010 self-employment tax.
Creates the State Small Business Credit Initiative.
Introduces a new requirement for owners of rental property to file information returns reporting certain payments made to suppliers of services
Allow participants in 457 Plans to treat elective deferrals as Roth contributions.
Most angel investors and venture capital groups utilize convertible debt and/or warrants in the majority of their investment arrangements. A major drawback is the exclusion of convertible debt and warrants from the Act. Holders of convertible debt or warrants must convert or exercise the security and hold it for five years in order to qualify for the tax exemption. This negates the purpose of structuring an investment utilizing convertible debt and/or warrants. Therefore, most angel investors and venture capital groups will receive little or no value from this law. As a part of the Small Business Jobs Act of 2010 the House and Senate passed increased penalties for failure to file a correct information return. The increase in penalties is intended to improve compliance and increase penalty income. In summary the changes are as follows:
First tier penalties for late filing increased from $15 to $30 per occurrence with the maximum increasing from $75,000 to $250,000 per year
Second tier penalties increased from $30 to $60 per occurrence with the maximum increasing from $150,000 to $500,000 per year
Third tier penalties increased from $50 to $100 per occurrence with the maximum increasing from $250,000 to $1,500,000 per year
The minimum penalty for each failure due to intentional disregard was increased from $100 to $250 per occurrence and still has to annual maximum
The maximum annual penalties for small businesses were also increased to $75,000, $200,000 and $500,000 for each tier.
Some banks have replaced their funds from the Troubled Asset Relief Program with funds from the SBLF. This practice has been criticized by the TARP Inspector General and members of Congress, as banks can use it to lift the restrictions imposed by TARP even while reducing their small business lending.
