The tax bill for small businesses looks like it will be passed very soon. Some of the items which will affect you are as follows:
1. You may expense up to $500,000 of assets placed in service in 2010 and 2011. There is a phase out which has also been raised for those years.
2. Some qualified leasehold improvements may be fully expensed instead of depreciating.
3. 50% bonus depreciation on new assets is re-instated for 2010.
4. Self employed medical insurance premiums can be deducted on Schedule C which will lower income subject to self employment tax.
There has been no movement on the outcome of extending part or all of the Bush tax cuts. We continue to think most will be extended due to the conservative movement in the political polls…..however there is no crystal ball. We will inform you as soon as any decision is made.