As an attempt to jumpstart the fragile economy, there are incentives within the American Recovery and Reinvestment Act to spur activity for individuals and business.
The following are five ways to leverage ARRA funds, from regional law firm Miller Nash.
- Extended 2008 business stimulus provisions. A number of provisions have been extended for expenditures made in 2008, including the 50 percent bonus depreciation provision, the election to accelerate alternative minimum tax for research and development credits and the ability of small businesses to fully deduct up to $250,000 for the purchase of new assets.
- Net operating loss carryback. This new provision allows businesses with less than $15 million in revenue to carryback their 2008 operating loss for up to five years – previously it was limited to two years.
- Reduced estimated tax payments. For 2009, an individual is not subject to penalty or interest for underestimating tax deposits if the payments are equal to at least 90 percent of the liability, if that person's adjusted gross income is less than $500,000 and at least half of that income is from small business.
- Small business capital gains relief. If a person invests in the stock of a small business for at least five years, he or she may exclude up to 75 percent of the gain.
- Enhanced work opportunity credit. Unemployed veterans and disconnected youth are new categories of out-of-work individuals who employers can hire to qualify for a work opportunity credit.
