The New Fiscal Crisis Bill’s Impact on Small Business

Politicians seem to have been able to strike a last minute deal to avert the fiscal cliff. So what does the new fiscal crisis bill mean for small businesses, America’s position in the global economy, and business owners?

While the new deal which breaks the stalemate over the fiscal crisis may help some dodge some new taxes, the bill which reportedly includes over $600 billion in tax hikes and few spending cuts doesn’t sound that different than simply falling off the cliff.

Perhaps the most significant difference is that most of the new taxes will be aimed at those earning more than $450,000 a year. On the bright side the bill extends accelerated depreciation for business investments in new property, equipment, and tax credits for R&D. Delays in cutting spending will partially be made up from new revenues generated by changing IRA rules, which could potentially hurt some types of investment or those reliant Americans fueling their businesses with cash from their Roth IRAs.

However, what is likely to be most damaging from the current situation is that many of the provisions of this fiscal bill are just temporary. It appears to be yet another case of the same old politics, the same old hype and perhaps some might have preferred not to see a deal struck just so they didn’t feel like their emotions and pocketbooks were being played with again. Expect more hype, standoffs, spending, and tax hikes ahead.

The bottom line for small business appears to be that there is still a window for taking advantage of some tax cuts and credits which should be capitalized on. Still, those anticipating worse things to come may well hit the skies in search of new homes which help alleviate their tax burdens. However, America still remains the top global destination for investment in 2013 and those who want to cash in on that can’t afford not to have a U.S. business presence, even if it is just an address and toll free number.