Federal Tax Small Business Recession Relief Efforts

In a recession, the nation often relies on federal small business tax relief to stimulate economic development by encouraging small business growth. Small businesses tend to thrive in a recession because the playing field is equaled between them and their larger competitors. The small businesses that survive the recession can often emerge as tomorrow's large corporations.

Hiring and Employment Taxes

One initiative tested in 2010 will be cutting the amount owed in employment taxes when a small business hires a previously unemployed person. This is meant to encourage small businesses to hire people who have been laid off from larger corporations. This was a relatively new concept when introduced following the recession of 2007, but it aims to get people back to work who have been having difficulty finding jobs since being laid off in a market with very high unemployment.

SBA Loan Incentives

The interest on some business loans may be tax deductible in an effort to encourage development. In particular, interest on loans guaranteed by the SBA may be very low or tax deductible for a small business. These loans are also designed to encourage growth in emerging markets through funds set aside toward new initiatives.

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