As a small-business owner or freelancer, you are part of a community that makes up a robust part of the US economy. In fact, according to the Freelancers Union, as many as 54 million Americans do independent work, which makes them small-business owners as far as the IRS is concerned. Plus, small businesses have provided over 55 percent of all jobs since the 1970s, according to the Small Business Administration.
But if businesses like yours have such significant economic impact, you may be wondering: why doesn't the government take notice? Where are the fat tax breaks? When do you get your slice of the pie?
Well, as you may know, our laws lag considerably behind the times. Maybe a change is afoot: small businesses are slated to get a little more attention from Washington this year in the form of tax bills and other proposals. But with the new Congress, it's anyone's guess how these bills will play out.
Let's take a look at some proposals that may impact your small business this year.
4 Key Areas of Small Business Legislation to Watch in 2015
According to a report by The Denver Post, the hot topics of legislative debate in 2015 will involve…
- Taxes. Both Obama and the GOP support a reduction in the corporate tax rate, which is currently 35 percent. Given that the majority of small-business owners operate as sole proprietors, such a change likely won't affect you. Sole proprietors report business income on personal tax returns, which is why SBO advocacy groups are pushing to lower individual taxes.
- Small-business tax deductions. The GOP wants to make the upfront deduction for the cost of computers and machinery permanent, which can be a good thing for small-business owners who don't want to fuss with deducting depreciated equipment for the next three to 20 years. Instead, you can deduct the cost of tangible business property that you use at least 51 percent of the time in one fell swoop. On December 16, 2014, Congress voted to extend the bill that increases the deduction to $500,000 (up from $25,000). The new bill also allows you to deduct off-the-shelf computer software.
- Healthcare law. You don't have to watch hours of C-SPAN to know that Republicans aren't the biggest fans of the Affordable Care Act. Now that the GOP makes up the majority of Congress, you can expect to see the ACA heavily debated this year. Of course, if a bill to repeal the law passes, Obama will ultimately veto it. Still, keep your peepers peeled for much ado about the mandate that companies with 50 or more employees offer insurance to employees who work 30+ hours a week. Read more about how the ACA affects small businesses in "Does Obamacare Affect Workers’ Comp Requirements?" and "What Obamacare Means to Your Business."
- Loans. Potentially good news if you're a woman and small-business owner: word on the street is that Democrats plan to reintroduce a bill to help you get loans backed by the Small Business Administration. Also, the SBA wants to make it easier for small businesses to borrow, which is why it's launching an online system to simplify and speed up the lending process. Read more about lending trends here: "7.5-Year High for Small Business Borrowing Bodes Well for Economy."
Want to get your democracy on? Track the bills that could affect small businesses at GovTrack.us.