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Why You Should Hurry Up and Start a Small Business Already

If you've been thinking about starting a small business, you might want to take the plunge before the end of the year. Why? Goodies in several recently passed new laws offer tax breaks that were previously unavailable to entrepreneurs.

Here's a quick summary of some of the breaks you and your investors could take if you start a business in 2010:

  • Only this year, you can deduct $10,000 of startup costs, double the previous figure.
  • Write off 100 percent of up to $500,000 in equipment costs your first year. If you have costs beyond there, you can write off 50 percent of them right away under the bonus depreciation clause.
  • Investors can sell qualified business stock between March of this year and January 2012 tax-free. Any profit is also exempt from the dreaded Alternative Minimum Tax.
  • Take a 35 percent tax credit on your company's health-insurance premiums.
  • Your local community bank may have more money to lend you, thanks to $30 billion in new federal funding for small-business loans.
  • Take a $2,500 hiring credit if you hire a qualified worker this year, or $5,000 next year.
  • Get a credit up to $5,000 if you hire 
There's more, but this gives you some of the highlights. Consult your tax professional for details on all the many ways your startup can benefit from the tax breaks in new federal laws.

Are you starting a business this year? If so, tell us your story in the comments. Can you take advantage of any of these credits?

Carol Tice, a freelance writer, is chief executive of TiceWrites Inc. in Bainbridge Island, Wash. She blogs about freelance writing at Make a Living Writing. Email her at carol@caroltice.com.

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