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Aspen Office
400 East Main Street
Aspen, CO 81611

Carbondale Office
0326 Hwy 133, Suite 200
Carbondale, CO 81623



Small Business Tax Bill Expected to be Signed into Law

The Senate and House have both passed the Small Business Jobs Act of 2010 and the President is expected to sign the legislation into law at any time. The Act contains a number of business-friendly provisions. Here are a few of the more significant ones.

• Doubles the Section 179 expensing limit to $500,000 for tax years beginning in 2010 and 2011. This allows small businesses to immediately expense the cost of otherwise capital purchases in the year of acquisition versus recovering the cost over time through depreciation.
• Allows expensing under Section 179 of certain leasehold, retail, and restaurant improvements.
• Reinstates the 50% bonus depreciation for qualifying property acquired and placed in service in 2010. This 50% bonus depreciation is available for costs not otherwise expensed under Section 179.
• Increases the exclusion for gain on the sale of small business stock after the date of enactment and before 1/1/2011 to 100% versus the current 75% exclusion.
• Doubles the allowable tax deduction for start-up expenditures to $10,000. Start-up expenditures must otherwise be capitalized.
• Allows self-employed individuals to deduct health insurance costs in computing their 2010 self-employment tax. These expenses had previously only been deductible for income tax purposes.
• Allows small businesses to carry back general business tax credits for 5 years, offsetting both regular tax and the Alternative Minimum Tax. Previously the carryback period was only 1 year.
• Requires owners of rental properties to report expense payments made to the IRS via Form 1099. This applies to payments made after 12/31/2010.

We anticipate more tax legislation before year's end and will keep you apprised of the impact these provisions might have on you. As always, please call if you would like for us to do a thorough analysis of the impact of these provisions.




Reese Henry & Company, Inc.
400 East Main Street Aspen, CO 81611
970.925 3771

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