The Weekly Dispatch: More Tax Relief... and Tax Penalties?

Last Updated Jan 31, 2011 1:00 PM EST

The Dispatch scours the Web every Monday to find must-read news that affects you and your business, and what it really means. Here's what I'm reading this week.

1. New SBA programs aim to turn on the lending spigot
Takeaway: Small business loans may be a little easier to come by this spring. Under the new Community Advantage loan program, the Small Business Administration will back loans of up to $250,000 made directly to small-business borrowers by nonprofit lenders.The idea behind it is to inject capital into underserved markets -- such as firms that are less than 2 years old and small businesses in low- to moderate-income communities -- which has been difficult since banks tightened credit.

A second program, the Small Loan Advantage, will also back loans of up to $250,000, but by existing SBA lenders, particularly banks. It also has fewer restrictions regarding the recipients of the loans.

In both programs, the SBA will back the loans up to 85 percent, a guarantee the agency is hoping will encourage banks to make relatively small loans, which tend not to be particularly profitable, but can make or break a small business.

2. Obama proposes more tax relief for small businesses
Takeaway: On the heels of a State of the Union Address that focused much on the importance of entrepreneurship, Obama will ask Congress to eliminate capital gains on some small business investments -- for more than five years. He's also proposing an expansion of the New Markets Tax Credit, which encourages investment in lower-income communities. The announcement comes today, so be on the lookout for more details.

3. Beware big changes in 1099 reporting rules
Takeaway: We've written a lot about the onerous 1099 requirement, a stipulation that was tacked onto the healthcare reform bill requiring companies to issue a tax form for every single transaction or accumulation of services totaling more than $600.00 in a single year, starting in 2012. But did you know that 2010's Small Business Jobs Act will increase 1099 and W-2 reporting penalties for this year? You can expect fines to double or even triple. Bottom line: Be extra careful with your forms this year to avoid paying fines during next tax season.

4. 26 events to help you grow your small business in 2011
Takeaway: If you're looking to learn more about digital marketing, social media, pitching your company to reporters or a bunch of other topics, check out this list of helpful seminars and networking events in 2011.

5. Better market research: 5 things you need to know
Takeaway: Want to avoid the biggest mistakes entrepreneurs make when dealing with market research? AOL offers five great tips. I like the simplest and most overlooked piece of advice: Actually use the results of your research. Don't be so in love with your product that you don't believe the criticism.

6. A brighter jobs report?
Takeaway: The national unemployment rate may still be hovering around nine percent -- and poor Nevada is dealing with a rate of 14.5 percent -- but the news wasn't all bad. In December, the unemployment rate fell significantly in 13 states compared with the December before. One of the biggest surprises was Michigan, which despite having lost a boatload of manufacturing jobs in the last few years, saw its unemployment rate drop of 2.8 percentage points.
7. Financial crisis was avoidable, inquiry finds
Takeaway: In case you missed it, the Financial Crisis Inquiry Commission said in its report that the 2008 crisis was "avoidable," and the result of risk-taking on Wall Street, widespread failures by regulatory agencies and corporate mismanagement. Not exactly news, but it's nice to hear that the whole financial crisis thing isn't just being swept under the rug. "The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done," the report's conclusion said. "If we accept this notion, it will happen again."

So who ends up with egg on his face? Basically everyone, from both chairmen of the Federal Reserve (Bernanke and Greenspan) to both secretaries of the Treasury (Geithner and Paulson) to the SEC.

Flickr photo courtesy of Phillip, CC 2.0)

  • Elise Craig

    Elise Craig has written for BusinessWeek, MarketWatch and washingtonpost.com. She is an alumna of the UC Berkeley Graduate School of Journalism and Georgetown University, and a huge fan of Hoya basketball.