Commerce Sec. Gary Locke on Small Business, Taxes, and Saving Money
The Intuit Small Business Blog is pleased to present a guest post from Gary Locke, the United States Secretary of Commerce.
Since Day One of the Obama administration, the empowerment of American small business has, for a very simple reason, been a central part of our economic recovery strategy: Because small businesses power America’s economy – creating approximately 60 percent of net new jobs, and 50 percent of private gross domestic product.
As the federal tax filing deadline approaches on April 15, I want to make sure that America’s small businesses are aware of the numerous tax incentives and other resources that are available to help them grow and compete in the global economy.
Let’s start with taxes. In the last two years, the Obama administration signed into law 17 different tax cuts that benefit small businesses. Some of them you might already know about:
- An exemption for the employer share of payroll taxes for unemployed workers you hire.
- An increase in the deduction for entrepreneurs’ startup expenses.
- Bonus depreciation tax incentives to support new investment.
Through the new healthcare law, there’s also up to $40 billion in tax credits available to up to 4 million businesses over 10 years. If you are self-employed, these credits enable you to deduct 100 percent of the health-care expenses incurred by you and your family. And if you have existing employees or hire new employees and offer them health care, the credits let you deduct that cost as well.
There are other smaller, but still important provisions you might not have heard of, like new rules allowing a five-year carryback of general business credits and tax relief and simplification of cell-phone deductions.
These tax benefits and many others are available to you right now, and if you haven’t claimed them on your 2010 return, I urge you to find details on how you can by visiting the IRS’s Small Business Jobs Act of 2010 Tax Provisions webpage.
As you plan ahead for 2011, you can also count on major tax incentives to improve your ability to grow your business and spur demand from your customers.
The tax cut package President Obama signed in December featured a new expensing benefit, which will allows companies to write-off 100 percent of their machinery and equipment purchases in 2011.
The December tax cut package also contained a significant payroll tax cut. For a married couple making $75,000, this cut will mean an additional $1,500 in take-home pay to spend at retailers, restaurants, and other businesses.
The Obama administration’s efforts to make the tax code more friendly to small businesses and entrepreneurs has also been accompanied by an unprecedented effort to make American businesses more competitive around the world. Last year, President Obama launched the National Export Initiative (NEI), which aims to double American exports by 2015, and has mobilized the entire federal government to help our businesses sell more of their made-in-the-USA goods and services abroad.
We’re already off to a good start. Last year, U.S. exports were up 17 percent over 2009. Exports have also been a key driver of America’s economic recovery, accounting for nearly half of U.S. economic growth since mid-2009.
But we can do a lot better, especially among small and medium-sized businesses. Consider the fact that only 1 percent of U.S. companies export – and of those that do, 58 percent export to only one country, typically to Mexico or Canada. There are plenty of reasons why many U.S. companies don’t export:
- They may have trouble getting the financing they need to produce more of their goods or be worried about getting timely payment from unfamiliar foreign customers.
- They may not have the networks to get the meetings they need with potential distributors, customers, or foreign government decision-makers.
The National Export Initiative, or NEI, is designed to help more companies overcome these hurdles. The Commerce Department is playing a central role in the NEI through our International Trade Administration and its network of commercial service officers in 77 countries around the world. These trade experts come to work every day with a singular mission: Finding more foreign customers for American-made goods and services.
And if you’re interested in breaking into new foreign markets or growing your share in existing markets, you should visit Export.gov, where you can find the help you need.
I know that America’s small businesses are competing every day in a global economy that’s tougher than it has ever been. All the measures I’ve just discussed will help you win that competition. And they’ll help America win the future.