(Washington, DC) - Congressman Baron Hill has added his name as a cosponsor of H.R. 1552, the Small Business Formation and Job Creation Act.  The bill would increase the maximum deduction for business start-up expenses under Section 195 of the Internal Revenue Code.
 
Under the current tax code, the maximum deduction for business start-up expenses is limited to $5,000 while additional expenses are left to be amortized over a longer period of time.  H.R. 1552 would increase the start-up deduction from $5,000 to $20,000 in order to provide additional money for entrepreneurs and small business owners during a time when accessing capital is extremely challenging.

“The success of small businesses is essential to our economy truly rebounding,” Hill said.  “During this time of economic downturn, small businesses have been presented with many challenges.  This bill addresses one of those challenges and will provide some much-needed relief to Hoosier small businesses.”

As this change to the tax code is in response to an economy in recession, the increased deduction only applies in 2009, 2010, and 2011.  H.R. 1552 is currently pending before the U.S. House of Representatives Committee on Ways and Means.