President Obama signed the Small Business Jobs Act into law on Monday September 26th, providing $12 billion in tax breaks and a $30 billion lending fund for small businesses. The bill eliminates all capital gains taxes on small business investments held more than five years. Over 1 million small businesses are eligible this year for investments that, if held for five years or longer, could be completely excluded from any capital gains taxation.
In addition, the bill increases for 2010 and 2011 the amount of investments that businesses would be eligible to immediately write off to $500,000, while raising the level of investments at which the write-off phases out to $2 million. An estimated 4.5 million small businesses and individuals will be able to make new business investments under this provision and earn a larger break on their taxes for this year, according to the White House.
Check back next week for part II of the Small Business Jobs Act!