It's nearly June, a time of the year when many people stop to reflect on the New Year's Resolutions they set for themselves six months ago. What promises did you make yourself? What improvements or changes have you made along the way? Are you positioned to reach your goals by the time the year ends?
If becoming an entrepreneur or starting a small business was on your list of goals and you haven't yet taken those steps toward small business ownership, you might not want to wait much longer. This year has already showed many signs of improvement in the economy, and with many available resources to help you navigate early challenges, it's looking more and more like 2012 is the year to take the bull by the horns and get started on realizing your dreams. Here are four reasons to do it now.
Reason #1: The Small Business Economy in 2012
In 2012, small business owners are generally optimistic. A recent Bank of America study was conducted in major metropolises throughout the country, and found that small business owners are excited and confident about the growth and opportunity in their local economies. The National Federation of Independent Business (NFIB) reported that, while consumer spending remains a concern for small businesses, small business owners have plans to increase hiring and expect to make more money this year than previously.
Reason #2: Small Business Lending in 2012
Small business lending is increasing as the economy continues to improve. Carole Smith, senior vice president and loan officer at Delta Trust Investments, recently told a Little Rock news station that the commercial loan sector is steadily improving as business customers feel more confident to make big purchases for their business. Trends like building property vs. renting, and upgrading technology equipment have been happening more and more over the last six months.
Reason #3: The Presidential Election in 2012
It being an election year, it's important to understand where the candidates stand on small business issues such as taxes and federal contracts.
According to the National Small Business Association:
"...Romney's proposed cut in marginal tax rates "will, in fact, help a number of small businesses, the overwhelming majority of which (83 percent) are structured as pass-through entities."
Looking at Obama's proposal, the NSBA ... noted positive points such as: the increase in the deduction for equipment purchases; the doubling of the $5,000 deduction for startup costs and a provision allowing cash accounting for some businesses."
Reason #4: Small Business Tax Credits in 2012
There are a handful of small business tax breaks in place that help small business owners invest in their business with new equipment and staff. Among others, these include:
- Small businesses can write-off a large portion of the cost of new equipment purchases in 2012 rather than depreciating the cost over time, which provides an immediate tax benefit. Look into Section 179 for more information.
- Federal law gives a tax credit to eligible small employers who provide health care coverage to their employees.
- Business books, including those that help you do without legal and tax professionals, are fully deductible as a cost of doing business. Fees that you pay to lawyers, tax professionals, or consultants generally can be deducted in the year incurred.
Additionally, President Obama recently proposed an additional credit, in which "a company would get credit against income taxes worth up to 10 percent of the increase in total wages in 2012, which could come either in the form of salaries for new hires or raises. A company that increased its payroll by $4 million would see a $400,000 income tax credit."
So what are you waiting for? Start your business now. Who knows what 2013 will bring?
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