Times are tough, so it’s critical for jewelers to seize whatever assistance and opportunities they can. One example is the recently passed “American Recovery and Reinvestment Act of 2009,” which includes much-needed small-business tax relief measures. In order to ensure that your business is getting the most from this new law, we recommend you check with your tax consultants.
Business provisions in the new law that could have the biggest impact on your business include:
- Refund: Small businesses can use losses from 2008 to offset profits in earlier years (any year more than two but less than six years ago) to obtain an immediate refund. The provision is limited to businesses with annual revenues under $15 million.
- Loan Guarantee: The Small Business Administration (SBA) will eliminate or reduce fees for participation in its flagship loan guarantee program, which insures banks against default by small business borrowers. The new law also increases to 90% the percentage of qualifying loans that the SBA can guarantee.
- Help with Existing Loans: The new law will also allow "small business stabilization financing," in which the SBA will loan money to pay off existing loans. Under the program, the SBA can issue or back loans of up to $35,000. Businesses can then use the money to make up to six months of payments on previous loans. Interest on stabilization loans will be fully subsidized, and the loans won't have any payments due for the first year. Borrowers must repay them within five years.
- Flexible Tax Payments: Businesses restructuring their debt could delay paying taxes on the transaction for five years, and then spread the payments over an additional five years.
Take The Tip:
- For more information on the Small Business Administration provisions in the act, go to www.sba.gov .
- The government has also set up a website, www.recovery.gov, designed to give people an opportunity to provide feedback and get information on the law.
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