Businesses Use Factoring - Awaiting Small Business Job Bill

www.acdfinancial.com There is a new bill under consideration in the U.S. Senate called the Small Business Job bill -- with some temporary as well as permanent changes to government programs, loan program enhancements and  tax relief-provisions.  With many small businesses surviving via alternative financing methods such as invoice factoring, there is much focus to helping small businesses get back on their feet.   This bill temporarily increases the capital gains exclusion for stock issued by some small businesses to 100 percent from the time the bill is enacted through the end of the year. The gain is limited to 10 times the original investment or $10 million.  It also would permit self-employed business owners to deduct their family's health insurance expenses from their self-employment tax income in 2010. Businesses with less than $50 million in gross receipts would be able to carry back general business credits to offset tax liabilities for five years. Currently it is  only  one year; and first-year write-offs would temporarily increase for business equipment from $250,000 to $500,000 and raise the cap on eligible expenditures that triggers a phase-out of the incentive from $800,000 to $2 million.   If  a company converts from a C  to an S corporation, it must retain its assets for at least 10 years or pay a 35 percent tax on the built-in gains that occurred before the company made the conversion, and this bill would reduce the period to five years for an asset sold in the 2011 tax year.   Although these provisions expire after 2011, the bill would expand Section 179 to cover some real property improvements. There's also a really generous 50 percent first-year depreciation for some kinds of property;  an increase, for 2010, the deduction for start-up expenditures to $10,000, from $5,000;  and the bill raises the cap on expenditures that triggers a phase-out of the deduction to $60,000, from $50,000. There is a penalty for failing to report on a tax return a transaction - set at 75 percent of the tax benefit and capped at $200,000 for corporations and $100,000 for individuals.  A more detailed summary of the bill and the legislative text are posted at the Senate Finance Committee Web site. These laws, if the bill is passed, will still take some time to put in place, and many businesses are still struggling.  Factoring can be an excellent alternate financing program, to meet bill, pay employees and survive until such time as the economy turns around. Original post blogged on b2evolution. Courtesy of IFG Network.