The current economic crisis has invited comparisons with the Great Depression of 1929. No wonder, the American Recovery and Reinvestment Act has been one of the most awaited legislations to have been signed in the recent past. Signed on February 18, 2009 by President Barack Obama, the bill is expected to provide the much needed relief to the US economy. While the bill addresses the needs of a wide range of people and sectors, it contains special provisions that recognize the unique needs of small businesses.
Some of the specific ways in which the Economic Stimulus Package works are:
$730 Million Funding To the Small Business Administration (SBA)
The stimulus package has made available additional funding to the tune of $730 million which is expected to go towards increasing loan availability and financing for small businesses as also incentives for third party lenders. It has also made provisions for affordable medical insurance for laid off employees and helps with the payroll management. The plan envisages the expansion of the SBA programs nationwide to increase the total capital flow.
Tax Relief
The plan allows small businesses to get tax relief by being able to write off a long list of expenses worth up to $250,000 in 2009 and 2010. This is higher from the earlier limit of $128,000 or the total income of the business whichever was lower. It is however important to note that the list of allowable expenses does not include land or structural improvements. Vehicles, computers and other office equipment are however included.
Apart from the above, certain other miscellaneous expenses like those linked to promotion will also qualify for tax cuts. Shareholders of small
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