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Five ways recent small business legislation can help entrepreneurs

male entrepreneurs(ARA) – Anyone thinking about starting a business, and entrepreneurs already running their own small business, face new opportunities, thanks to recent changes in legislation. If you’ve been dreaming of opening your own business, following that dream into 2011 will allow you to capitalize on these new opportunities. Many of these legislative acts have an expiration date, while some offer advantages many years into the future.
BizFilings points out that implementing these five important takeaways will save you money and help position your business for success.
1. Hiring in 2010 can lead to a tax break and tax credit
Employers hiring workers who have been unemployed at least 60 days are not only helping to reduce the unemployment rate, they may also qualify for an exemption from the 6.2 percent employer portion of the Social Security tax as part of the HIRE Act. The exemption applies to wages paid to any qualified employee hired after March 17, 2010. The value of this tax relief (per employee) can range from hundreds to thousands of dollars. The act also makes available an additional general business tax credit of up to $1,000 for each qualified employee hired in 2010 who is retained for a full year.
2. Elimination of capital gains tax provides incorporation benefits
female entrepreneurThe Small Business Jobs Act includes a special provision that eliminates the capital gains tax. This provision applies only to C corporations. Through the end of 2010, non-corporate investors, such as individuals or partnerships, who invest in the stock of a qualified small business corporation and who hold that stock for at least five “Incorporating your small business into a formal entity, like a C corporation or limited-liability company, does more than offer limited-liability protection by separating the owner and the business,” says Karen Kobelski, general manager of BizFilings, a full-service, online incorporation provider. “Incorporation lends credibility to the business’ operations whether interacting with banking officials, equipment resellers or potential investors.” If your business isn’t already a C corporation, it is easy to make it one by incorporating online.
3. Giving small business owners and employees health insurance has benefits for the future
Offering employees health insurance has not always been an option for every small business. With the new Affordable Health Care Act, this grim reality may be a thing of the past. Small businesses with fewer than 25 full-time employees are eligible for a tax credit for up to 35 percent (increasing to 50 percent in 2014) of premiums paid for employee health insurance. Businesses with average employee annual wages of $50,000 or less can qualify for the credit. This credit helps minimize the burden of providing health insurance for employees. The Small Business Jobs Act makes it possible for more people to have health insurance. A provision in this act allows business owners to deduct the cost of health insurance in calculating their 2010 self-employment taxes. Health insurance that covers business owners’ families can also be deducted.
4. Additional opportunities to obtain small business loans permit future lending
Based on the new law that is part of the Small Business Jobs Act, not only are more businesses eligible to apply for loan guarantees, but the loan amounts are higher, as well. The maximum loan amount available under the Small Business Administration’s 7(a) loan program and 504 loan program has increased from $2 million to $5 million. The maximum loan amount available under the SBA’s Express Loan Program has increased from $350,000 to $1 million. The increase in available loans may make it possible for some small businesses to get the support they need to succeed.
5. The cost of acquiring capital assets has been lowered
Businesses that invest in equipment and other assets can take advantage of the 50 percent “bonus depreciation” deduction until the end of 2010, thanks to the Small Business Jobs Act. New businesses can also deduct more money and recoup start-up costs up front, with the allowable amount of start-up cost deductions rising to $10,000 in 2010. In addition, the expensing election has been extended through 2011; the allowable amount has been increased to $500,000 and the investment limit to $2 million – the highest amounts ever permitted. Businesses can elect to expense costs in either year that best fits within these new increases and their budgets.
These new laws are positively impacting America’s entrepreneurs and their financial futures. Position your business for success at the end of 2010, and start 2011 off on the right foot by taking advantage of these tax breaks, benefits and deductions.

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Settling your credit card debts

(NAPSA)-Consumers with overwhelming credit card debt may be tempted to seek help from companies that promise to erase their debt for pennies on the dollar, but the Federal Trade Commission (FTC), the nation’s consumer protection agency, urges caution.

Debt settlement companies claim they can negotiate with your creditors to reduce the amount you owe. Some say they can arrange for your debt to be paid off for a much lower amount -anywhere from 30 to 70 percent of the balance you owe.

But there is no guarantee that debt settlement companies can persuade a credit card company to accept partial payment of a legitimate debt. Even if they can, you must put aside money for your creditors each month and pay the hefty fees that debt settlement companies charge before they settle any of your debts. On top of that, you may have to pay a final fee to a debt settlement company that’s a percentage of the money you’ve supposedly saved. Meanwhile, it may be months-or even years-before the debt settlement company negotiates with your credit card company to settle your debts. And, if you stop making your payments in the meantime, the credit card company will usually add late fees and interest to the debt each month. That can cause your original debt to double or triple.

When You’re in a Hole…

The FTC suggests that the first thing you should do if you are having trouble managing your credit card debt is contact your credit card company and try to negotiate a settlement, even if you have been turned down before. If at first you don’t succeed, be persistent.

Another option is to contact a credit counselor. A new law requires credit card issuers to include a toll-free number on their statements that directs cardholders to information about finding nonprofit counseling agencies. Reputable credit counseling organizations advise people on managing money, bills and debts, help them develop a budget, and usually offer free information and workshops.

If you decide to pay a company to negotiate your debt, do some research. Consider other people’s experiences. One way to do that is to enter the company name with the word “complaints” into a search engine. Read what others have said.

Red Flags

The FTC suggests it’s best to avoid any company that promises to settle your debt if it:
•    touts a “new government program” to bail out personal credit card debt;
•    guarantees it can make your unsecured debt go away;
•    tells you to stop communicating with your creditors;
•    tells you it can stop all debt collection calls and lawsuits;
•    guarantees that your unsecured debts can be paid off with pennies on the dollar;
•    requires that you pay the full fee within the first few months.

To learn more about getting out of the red without spending a whole lot of green, read “Settling Your Credit Card Debts” at www.ftc.gov/MoneyMatters or call toll-free 1-877-FTC-HELP (1-877-382-4357).

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Intandem Credit Union
Ray Winnie


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