A bonus tax depreciation of 50% on certain assets may be available to businesses of all sizes as a result of the $787 billion economic stimulus plan approved in February, according to the US Chamber of Commerce.
The action allows small businesses to immediately depreciate 50% of investments of certain assets.
The US Chamber of Commerce also successfully lobbied for an extended net operating loss carryback period of five years for small businesses with annual receipts of $15 million or less.
Other tax advantages for small businesses include:
• Increased small business expensing provisions that allow small businesses to immediately deduct up to $250,000 in equipment purchases rather than depreciate the cost over time.
• A one-year delay, to 2012, of the 3% withholding tax on all government payments originally scheduled to go into effect in 2011.
• Significant reductions in borrower and lender fees for the Small Business Administration's 7(a) and 504 loan programs and increased loan guarantee caps.
• Deferred payment of taxes on certain income when debt is repurchased at less than face value.