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HR 9 - Income Tax Deduction for Small Businesses - National Key Vote

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Title: Income Tax Deduction for Small Businesses

Vote Smart's Synopsis:

Vote to pass a bill that establishes an income tax deduction of 20 percent for small businesses, beginning in the 2012 tax year.

Highlights:

  • Authorizes a qualified small business to claim a tax deduction of 20 percent of the lesser of the following (Sec. 2):
    • Qualified domestic business income for the taxable year; or
    • Taxable income for the taxable year.
  • Defines a “qualified small business” as any employer engaged in a trade or business who employs fewer than 500 full-time employees (Sec. 2).
  • Defines “qualified domestic business income” as the businesses' gross receipts for the taxable year, minus the cost of any goods that were sold, business expenses, and losses (Sec. 2).
  • Limits the deduction to 50 percent of the greater of the following (Sec. 2):
    • The wages paid to employees who are not owners of the business; or
    • The sum of the wages paid to non-owner family members and owners of less than 10 percent of the business' stock, capital or profits.

 

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