Small Business Jobs Act: What Businesses and Bloggers Need to Know
I joined the White House Small Business Jobs Act blogger call yesterday, wondering if there might be something in the bill for those of us who blog for pay. In attendance were Karen Mills, head of the Small Business Association; Gene Sperling, counselor to Secretary of the Treasury Tim Geithner, and various members of the White House Office of Public Engagement (Valerie Jarrett, Tina Tchen).
If, like me, you're a sole proprietor or otherwise one-woman shop whose business is either based in social media, freelance writing, or marketing that makes use of social media for some other good or service you provide, you might experience all the struggles of a small business but feel left out of the jump-starts available for "bigger" small businesses. I like to think of us as micro-entrepreneurs -- too small to take on venture capital, not likely to get a bank loan for small businesses, but nevertheless hustling for paid work.
Admittedly, the bill has much to offer if you're the owner of a restaurant, a small manufacturer, supply goods or services to other businesses, or are involved in import/export. These larger small business owners, many of whom were queued up for Recovery Act stimulus funds which dried up in May, will now be relieved to know that a major impact of the Small Businesses Jobs Act (SBJ) is to loosen up credit to small businesses via community and regional banks. Not only will the pipeline get moving again, but the loan limits have been raised. You may have heard how local and regional banks weren't lending or were insufficiently capitalized to lend to small businesses? Well, they have no excuse now.
This video and list of the finer points of SBJ gets pretty detailed.
To give highlights -- there are eight new tax cuts for businesses effectively immediately, five of which I've noted here:
- Zero capital gains taxes on investments held for five years or longer
- Raised limits on expenses and investments, up to $500,000
- Raised limits on startup expenses to $10,000
And of greatest interest to bloggers:
- Starting this year, deductions on health insurance costs for the self-employed when calculating self-employment taxes
- Tax relief for and simplification of cell phone expenses
Now, of the last two, if you're lucky enough to make a sufficient amount from your web-related or other business that you use earnings to purchase health insurance for you and your family, those expenses may be deductible. Likewise, I know how we blogger/social media types love our cell/smartphones, and yet this necessary expense can get costly. Data as well as voice plans can run $80-$120/month. This could possibly be another area where we bloggers and social media folks could really get a break on equipment we use for our day-to-day business. CAVEAT: please check with your accountant/tax preparer for the details. During the blogger call, I added my question to the queue, but I didn't get a chance to ask my question and no one who organized the White House call responded in time to my followups via email. Lacking a definitive statement from the agencies involved, I'd go to your tax professional for the most helpful and accurate advice on the matter.
I'd also like to emphasize that Treasury and the SBA will be prioritizing programs that benefit businesses that can hire 2, 10, or even 20 twenty people in the next couple of months. Gene Sperling and Karen Mills made sure to say that this first blogger call will be one of many as the programs continue to roll out. It's understandable for those reasons that not as much attention has been given to the sections that might benefit us. We micro-entrepreneurs should hang tight and keep asking for clarification. The worst we can learn is that the rules don't cover us and we're back to status quo.
For the loan programs, Gene Sperling promised term sheets and applications okayed within the next couple of weeks -- lightning fast when you consider the bureaucracy that must be moved. Karen Mills added that if you have one of these "bigger" small businesses, you should take advantage of free counseling at more than 900 small business development centers nationwide and the counselors will help you whip your budget and application package into shape. Repeat, this service is free and funded through taxpayer dollars at your local Small Business Administration offices.
In essence, this really was a bipartisan bill that had been in the works since 2009 and finally over the spring and summer the Small Business Jobs Act moved through the House and Senate to become law yesterday. It's a huge assist for small business owners, and expected to boost hiring in the small business sector and bring us one step closer to the economic recovery we're all longing for.