The federal legislation makes some changes regarding income tax filing. This tax changes might give another opportunity for self-employed individual and micro-businesses to enlighten their income tax returns.

According to The Small Business Jobs Act of 2010, they provides several tax changes which is more beneficial for small businesses while the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 kept a several tax items the same.

The business owner must be aware of these changes when they file for 2010 income tax returns.

•    Standard Mileage Rates – For a business owner who uses their vehicle for transportation of goods are eligible to deduct 50 cents per mile driven, they can also deduct 16.5 cents for medical miles rate and if it is charitable they can deduct 14 cents per mile.
•    Increased of AMT exemption – For 2010 tax year, the Alternative Minimum Tax exemption for married couples who will file jointly was $72,540 while $47,450 for those single filers.
•    Deduction of Health Insurance for self-employed – The premiums paid by small businesses to their health insurance was deductible on page 1 of Form 1040. But this premium can also be deductions that will reduce their earnings from being self-employed and other self-employment taxes. It can cost 15.3 percent savings for the health insurance.
•    Retirement Plan contributions – If an IRA contributor is not covered on the workplace retirement plan and being married to a someone who is being covered, the couples deductions was phased out if their income is ranging from $167,000 to $177,000.
•    An Increase on start-up expenses deduction – The amount of deductions for start-up expenses of new businesses was increased to $10,000 from $5,000. But, for not more than 180 days any of the additional amounts must be expensed.
•    Increase of Maximum Section 179 deduction – Under the Code Section 179, additional incentive will be received by small businesses to invest new equipments with an increase to the allowable maximum deductions from $250,000 to $500,000. Plus, the phases out limit of deductions are increased from $ 2 million to $800,000.

For more information visit the www.IRS.gov regarding tax law changes.