The Small Business Jobs Act 2010 and you.

Not all photography news is glamorous. Some of it can be down right brain numbingly boring for me. Like paying taxes for instance. Oh, how I love to pay taxes; social security, state income taxes, federal income taxes, corporate taxes and the ever present state sales tax. There is even a tax for when you purchase something online, "use" tax. The state law for Mississippi has a use tax for buying flash bulbs for my photography studio. They are seriously behind the times.

The Small Bussines Jobs Act was signed into law in September by President Obama. I had not thought much of it until I got a letter from our CPA yesterday. There are a couple things you should be aware of as a small business owner. These are things you should be talking to your CPA about. By the way you SHOULD have a CPA. Unless you are a certified CPA you should not be doing your own taxes. Treat your business like a business and hire a pro to do your taxes.

Several points about the new law from www.whitehouse.gov. A lot of this sounds good. The best thing I see here is that I can now deduct my families insurance premium pre-tax on my 2010 tax return.

 An Increase in the Deduction for Entrepreneurs' Start-Up Expenses:The bill temporarily increases the amount of start-up expenditures entrepreneurs can deductfrom their taxesfor this year from $5,000 to $10,000 (with a phase-out threshold of $60,000 in expenditures), offering an immediate incentive for someone with a new business idea to invest in starting up a new small business today.

Extension and Expansion of Small Businesses' Ability to Immediately Expense Capital Investments: The bill increases for 2010 and 2011 the amount of investments that businesses would be eligible to immediately write off to $500,000, while raising the level of investments at which the write-off phases out to $2 million. Prior to the passage of the bill, the expensing limit would have been $250,000 this year, and only $25,000 next year.  This provision means that 4.5 million small businesses and individuals will be able to make new business investments today and know that they will earn a larger break on their taxes for this year.

Extension of 50% Bonus Depreciation:The bill extends - as the President proposed in his budget - a Recovery Act provision for 50 percent "bonus depreciation" through 2010, providing 2 million businesses, large and small, with the ability to make new investmentstoday and know they can receive a tax cut for this year by accelerating the rate at which they deduct capital expenditures.

A New Deduction of Health Insurance Costs for Self-Employed:The bill allows 2 million self-employed to know that on their taxes for this year, they can get a deduction for the cost of health insurance for themselves and their family members in calculating their self-employment taxes. This provision is estimated to provide over $1.9 billion in tax cuts for these entrepreneurs.

Tax Relief and Simplification for Cell Phone Deductions:The bill changes rules so that the use of cell phones can be deducted without burdensome extra documentation - making it easier for virtually every small business in America to receive deductions that they are entitled to, beginning on their taxes for this year.

Limitations on Penalties for Errors in Tax Reporting That Disproportionately Affect Small Business:The bill would change, beginning this year, the penalty for failing to report certain tax transactions from a fixed dollar amount - which was criticized for imposing a disproportionately large penalty on small businesses in certain circumstances - to a percentage of the tax benefits from the transaction.