Small Business Tax Breaks

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Small business tax breaks may expire soon. As the year 2009 comes to an end, Americans who run small businesses are scratching their heads. While the federal government seems hell-bent on nationalizing health care – at a great cost, but little benefit, to currently successful businesses – it is ignoring the elephant in the room: THE TAX LAW.

On December 31, 2009, less than two weeks from this posting, NUMEROUS tax breaks for small businesses will automatically expire as we ring in the new year. INCREASED TAXES will result automatically. In other words, instead of raising taxes by NEW TAX LAWS, the taxes that small businesses pay will go up next year dramatically due to the expiration of tax incentives many small businesses have depended upon for years. These incentives were carefully crafted – by a prior and much wiser congress -- to stimulate economic growth and incentivize entrepreneurs to invest in technology and new equipment, while at the same time, providing the maximum gross tax revenue for government.

During tough times businesses fall into two categories, those that make it and those that don’t. Those that don’t make it fall either quickly or slowly. Both are painful, for everybody involved: the owners, the employees, the vendors, the lenders, the chauffeur, the gardeners and the cook. Failure trickles down just as prosperity does, contributing to the downward spiral.

The ones that make it fall into three categories: Those who have saved and have adequate resources to make it through, those who make strategic improvements quick enough on every level that turn out to be correct, and those who can take advantage of an unusual uptrend in the storm that drowns out the others. For example, if you’re in the business of installing or producing solar and/or wind energy systems right now, you’re not concerned about the current recession.

At Harvard Business Services, we reacted early to reduce costs across the board. When the State of Delaware DOUBLED many of its filing fees, we were forced to raise our prices to customers.

Survival in 2009 is one thing. Survival next year is another. Those of us who think we KNOW how to adapt to what’s coming in the way of new and increased costs of doing business are just BS-ing.  We’re scratching our heads. Sure, we’ll have to increase prices; sure, we’ll have to trim the staff by another 15%; sure we’ll grow at the same time… requiring more people. Sure. Hmmmmmm. Scratch-scratch.

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