There is legislation pending in Congress that, if enacted, would be a boon to small business and help jumpstart the economy. Proposed changes include extending Section 179 bonus depreciation to 100 percent and increasing it from its current $139,000 to the 2011 amount of $500,000. Also recommended were restoring the self-employed health insurance deduction to cover employment taxes and shortening the holding period for built-in gains to ease access to capital for S corporations.
Also possible is passage of the bipartisan Startup Act 2.0, which would provide startups the tools to grow and create jobs. Provisions include a refundable research and development tax credit for young startups less than 5 years old and with less than $5 million in annual receipts. This provision is designed to allow startups to offset payroll tax liability. An additional provision would make permanent the exemption of capital gains taxes on the sale of startup stock held for at least five years so that investors could provide financial stability to young companies.
The Small Business Taxpayer Bill of Rights Act would lower compliance burdens for taxpayers, strengthen taxpayer protections, compensate taxpayers for IRS abuses and improve taxpayer access to the Tax Court.
Although legislation could be addressed in the months ahead, it is most likely that no action will be taken before the November elections.
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