Many of the tax breaks available to small business are nothing new, but several were added or expanded to under the Small Business Jobs Act, which President Obama signed into law in September 2010. According to Kay Bell from Bankrate, many tax breaks exist for small businesses (sales range of $7M to $25M and fewer than 1,000 employees, according to IRS classification), and plenty more that apply to even smaller operations. Bell identifies a few handy tips for business owners:
Aggressively write off expenses — The SBJA allows small businesses to write off up to $500,000 in business expenses (under Section 179) in 2010 and 2011. And if you recently opened up shop, take advantage of of a one-time $10,000 write-off for startup expenses.
Don’t forget your phone — It used to be that the IRS gave no special consideration for cell phones as necessary to business. No longer. Bell writes: “That situation, however, has changed, thanks to the Small Business Act. The law de-listed cell phones and other similar telecommunications equipment, effectively removing the requirement that phone users keep detailed logs of business vs. personal use.”
Remember what’s always worked — The Small Business Act introduced a new, if complicated, tangle of deductions to sift through. However, many of the tried and true SMB tax breaks still apply, including deductions for expenses related to seminar and training classes, trade organization membership fees, Internet access and subscriptions to industry newspapers and magazines.