Some tax relief looming for small business

The tax relief package has comfortably passed the House and hopefully will finally make life a bit easier for startups and other small businesses.

From the link:

The bill, which would eliminate capital gains taxes on investments in small businesses, passed on a vote of 247-170.

It is a companion bill to legislation backed by President Barack Obama that the House is to consider on Wednesday. That bill would create a $30 billion fund to encourage community banks to lend to small businesses.

“Small businesses need capital to create jobs and lead our economic recovery and these bills contain important tax cuts and lending opportunities that will help give small business owners the resources and flexibility they need to help their businesses grow,” said House Ways and Means Committee Chairman Sander Levin.

The bill gives small businesses a bigger tax break on start up costs and creates a program to help small businesses struggling to repay loans.

Retirement planning for the self-employed

Are you self-employed and looking for retirement planning options? Of course you take the process completely into your own hands through savings and investing, and I bet that’s the approach a lot of self-employed tax payers do. Being self-employed at all takes a certain amount of independence in your character. For the self-employed looking for more traditional retirement planning that’s geared for their specific needs two decent options include a solo 401(k) and a Simplified Employee Pension (SEP).

And keep in mind the tax savings from these retirement planning and saving vehicles. Here’s a good breakdown on what circumstances lend best to each option.

From the link:

A solo 401(k) may be your best bet if most of your income is from self-employment. You can contribute $16,500 to a solo 401(k) in 2009 plus 20% of your net business income (which is business income minus half of your self-employment tax), up to a maximum of $49,000 in 2009. You can also make a catch-up contribution of $5,500 if you’re 50 or older. You can’t contribute more than your business income for the year, but even if you earn just $16,500 from self-employment, you can contribute the entire amount to a solo 401(k). You must open a solo 401(k) by December 31, and you have until April 15, 2010, to make your 2009 contributions Your combined contributions to a solo 401(k) and any 401(k) you may have through another job cannot exceed the contribution limits.

If you have a 401(k) through a primary job and earn some freelance income on the side, a SEP-IRA may be a better option. It’s easier to set up — you can open an account at most brokerage firms or mutual fund companies that offer IRAs — and you can set aside 20% of your net business income, up to a maximum of $49,000 in 2009. You have until April 15, 2010, to open a SEP and make your 2009 contribution. See Do-It-Yourself Retirement Plans for more information.

Small business and capitalization

Looks like entrepreneurs are turning more often to alternate finance in this weak credit and economic climate.

From the link:

The credit binge and the crash that followed have left entrepreneurs in a bind. Banks, faced with rising defaults, dramatically tightened lending standards to reduce their risk. Small business owners who borrowed liberally when credit was easy were blindsided by the downturn, and many now find their credit scores wrecked. Those with little debt on their books but facing slipping sales are also perceived as risky: They’re shut out of traditional loans and even credit cards, and represent a growing market of businesses that banks won’t touch.

Enter the alternative finance companies. They include asset-based lenders (which make secured loans for purchases of equipment or inventory), factors (which buy unpaid invoices at a discount), and merchant cash advance providers (which pay up front for the right to collect a share of a retailer’s future credit-card sales). These sources of funds generally cost more, sometimes much more, than bank credit. But businesses that survived the recession will need to buy inventory and equipment, expand operations, and hire workers during a recovery—and they are finding few other options to fund their growth.

10 business books …

… to read right now according to MainStreet.

From the link:

You can see the panic in the eyes of business leaders. But the country has survived interest rates at 18% and previous stock-market meltdowns. This will pass, and the country will rebound because smart leaders take a step a back, assess the situation for opportunities and read books.

That’s right, whether you are a leader or an aspiring entrepreneur, exposing yourself to ideas is the way to succeed. You can’t cut your way to success. No, you innovate your way through new products, ideas and improved processes. This is something this country has always been good at. Here are 10 books to consider.