On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010 (HR 5297) (the “Act”). The Act, among other things, provides a number of targeted tax incentives for large businesses, small businesses and individuals. Many of these tax incentives have relatively short life spans, while others are intended to become permanent. The following is a brief overview of the tax incentives in the Act that are relevant to many business owners.

Increased Deduction for Qualified Business Start-Up Expenditures

The Act increases the amount of qualified business start-up expenditures that a taxpayer may elect to deduct from $5,000 to $10,000 for tax years beginning in 2010. These deductions generally phase out for expenditures above $50,000. The Act increases the deduction phaseout threshold so that the $10,000 is reduced, but not below zero, by the amount by which the cumulative cost of qualified business start-up expenses exceeds $60,000.