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Friday, July 10, 2009

Grassley Introduces Small Business Tax Relief Act

Financial Planning Magazine

By WebCPA

July 9, 2009

Sen. Charles Grassley, R-Iowa, has introduced a bill to lower the tax burden on small businesses.

Grassley, ranking member of the Senate Finance Committee, introduced the Small Business Tax Relief Act of 2009. …

The bill includes provisions that would: • Increase the amount of capital expenditures that small businesses could expense from $250,000 to $500,000 to encourage businesses to invest in new equipment; • Allow more small C corporations to benefit from the lower tax rates for the smallest C corporations; • Take the general business credits out of the alternative minimum tax for those sole proprietorships, flow-throughs and non-publicly-traded C corporations with $50 million or less in annual gross receipts; • Extend the one-year carryback for general business credits to a five-year carryback for small businesses; • Provide a 20 percent deduction for flow-through business income for small businesses, which are defined as flow-through entities with $50 million or less in annual gross receipts; • Lower the potential tax burden when a C corporation becomes an S corporation; and • Expand the net operating loss provision contained in the stimulus bill, allowing small businesses with $50 million or less in gross receipts to get the benefit of the five-year net operating loss carryback.

“I hope this bill gets bipartisan support,” said Grassley. “Job creation is a bipartisan issue and really should be a non-partisan issue.”

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