Congress has passed a small business jobs bill (the Small Business Jobs Act of 2010) with valuable individual and business tax incentives. Many of the $12 billion tax incentives are temporary so taxpayers
have only a short window in which to take advantage of them. Others are permanent but require careful
planning to maximize your tax benefits. Below we highlight some of the tax incentives and revenue raisers in the new law.

Although the new law is labeled a “small business bill” it actually is much more. The new law includes a
number of provisions targeted to small businesses and investors in small businesses, such as 100 percent exclusion of gain on qualified small business stock, an increase in the amount allowed as a deduction for start-up expenditures, and more. Other provisions may benefit businesses of all sizes, such as extended bonus depreciation and extended and doubled Code Sec. 179 expensing. Many individuals will benefit from a new rule allowing rollovers from elective deferral plans to Roth designated accounts, along with other retirement savings incentives. Self-employed individuals benefit from a temporary deduction for health insurance costs in computing self-employment income.

To ensure passage of the bill, supporters had to find revenue raisers to pay for the tax incentives. The
largest revenue raiser designed to force greater disclosure of taxable income is a new information reporting requirement for rental property expenses, which is projected to raise $2.5 billion over 10 years. The new law also increases information return penalties. An additional revenue provision places curbs on the cellulosic biofuel producer credit, and another shifts corporate estimated taxes in 2015.

The new law is much more than a small business bill, although many small businesses and their owners will benefit greatly from its provisions. Many provisions within the new law are broad-based and far-reaching. Moreover, many of the tax incentives are temporary, requiring prompt
action to take full advantage of them.

Please contact Simons Bitzer & Associates for additional information. We can help you design a tax strategy to maximize your benefits from the new law. Visit www.SimonsBitzer.com to read a more detailed explanation of these changes.