How will small businesses benefit from ARRA?
ARRA provides a number of tax incentives that benefit small businesses. Here is a summary of key ARRA tax provisions which impact businesses, large and small: • Bonus Depreciation: Allows businesses to recover the cost of capital expenditures over time according to a depreciation schedule. Extends the 50% special depreciation allowance that was available for 2008 to 2009. • Small Business Expensing: Allows small businesses to immediately write off the costs of capital expenses in the year of acquisition from $125,000 to $25,000 in lieu of recovering these costs over time through depreciation. • Small Business Loss Carry-backs: Increases cash flow by providing a five-year carry-back of 2008 net operating losses for small businesses. • Spurring Investments in Businesses: Spurs investments in small businesses by cutting the capital gains tax on investors on small businesses who buy stock (in the next two years) and retain it for more than five years. • 3% Government Withholding: Delays th
