Throughout their campaigns, President Obama and Governor Romney have each claimed to be the better candidate to support small business. The President has repeatedly pointed to the 18 tax cuts he's made on behalf of small businesses. Do you know which tax cuts he's referring to?
This week CNNMoney dug into the details and the math. Turns out the Obama campaign is counting some cuts twice, and many have already expired. By CNN's count, there were only 14 tax breaks, not 18; 4 have expired, and 5 have been weakened. That leaves only 5 still in full effect for small businesses. Chances are great that you are not benefiting from more than one of them.
The first cut of the five reportedly still in place was made available by the Affordable Care Act; the other four were created by the Small Business Jobs Act. They are:
- a tax credit to companies that pay some health insurance and have 25 or fewer employees with average salaries of $50,000 or less. (A credit that, as we've reported, few businesses are claiming.)
- a reduction in the number of years an owner must wait to sell a company after changing its legal designation to experience lower taxes.
- a streamlined tax deduction for mobile phone expenses.
- a doubling, from $5,000 to $10,000, in deductible startup costs.
- a cap, at 75 percent of the total mistake, on the penalty a small business must pay for making an error when filing taxes. (As we've reported, tax code complexity often trips up small businesses; would more small business owners benefit from a simplified tax code than a reduction in fines?)
For details on other tax cuts that President Obama counts among the 18 he has made for small businesses, see the full report from CNNMoney, Obama's 18 Small Business Tax Cuts, Explained.