Tax Provisions - Proposed Jobs Legislation's Tax Provisions Could Aid Small Business
Author: M. Dustin Wilder, Coastal States Wealth Management
The $447 billion American Jobs Act proposed by President Barack Obama in September has been cut down by the Senate and criticized by the National Federation of Independent Business and the U.S. Chamber of Commerce for inadequate job creation provisions.
Nevertheless, you might watch the fate of its proposed tax provisions. They include:
• Payroll tax holiday – This would eliminate the entire 6.2% payroll tax on payroll increases – for new workers or for higher wages – on any amount up to $50 million more than the previous year.
• Payroll tax trimming – The employer’s share of the payroll tax (6.2%) would be cut to 3.1% on the first $5 million in wages, a job growth stimulant the White House says could benefit 98% of small businesses with payrolls less than $5 million.
• Extension of 100% expensing – Allowing firms to write off through 2012 the full cost of new plant and equipment. Otherwise, this provision will expire
• Tax credit for certain hires – Allowing a $4,000 tax credit for hiring someone unemployed for at least six months; a credit of up to $5,600 for hiring a veteran (up to $9,600 if the veteran is disabled).
Some of these may show up as provisions in other legislation.
This article was provided by M. Dustin Wilder of Coastal States Wealth Management, (843)836-3320.