Guidant Financial Group Blog

Small business owners whose businesses performed at a loss in 2008 may be eligible to receive emergency refunds within weeks of President-elect Obama’s inauguration. According to a recent BusinessWeek article, business owners who can report a net operating loss (NOL) for the last year will be able to offset income from the business for the last five years instead of the standard two. This could qualify owners of formerly profitable businesses to receive substantial refunds. The Section 179 first-year expensing deduction limit is nearly doubling from $133,000 to $250,000, and these benefits combined could help a struggling business reinvigorate its operations within a few months.

This is great news for all business owners who have seen profits fall and credit tighten in the last year. The increased Section 179 deduction is also great for business and franchise owners who are just starting out. For some, of course, the refunds alone may not suffice to fully recapitalize a business. If that is the case, 401(k) small business financing may provide the additional funds to stabilize a business for better results in the New Year.