Earlier this month, the government came together and Congress passed the American Taxpayer Relief Act of 2012 (ATRA) which President Obama then signed into law. While the effort failed to extend cuts to the payroll tax (the rate had been reduced from 6.2 percent to 4.2 percent for 2011 and 2012, but will now go back up to 6.2 percent) it did provide some extensions that should prove to be beneficial to the self-employed.
The Small Business Administration released an article that highlighted some of the key extensions in the bill, and we encourage you to read through it.
As the article points out, there are some signs of hope on the horizon for the self-employed, including the extension of the research and experimentation tax credit. This tax credit expired back in 2011, but you will be able to apply it retroactively for 2012, so if you are a small business owner who conducts any R&D, make sure you remember this one.
Additionally, if you purchased any property or equipment, the section 179 deduction and the bonus depreciation provision have been extended through the end of 2013. Also extended in the bill were incentives to hire military veterans or individuals from undeserved communities.
There were certainly some great provisions and extensions in the ATRA, but we didn't get everything. Don’t be discouraged, and be sure to get involved and make your voice heard so Congress can continue to better improve the outlook of self-employed business owners like you. The NASE has a great resource on our website in our Legislative Action Center so be sure to check it out today and tell us about the issues that are important to you!