On June 13th, The House Ways and Means Committee approved the “Small Business Jobs Act”. This is a big victory for small businesses all around the country, as contractors and other gig workers are able to raise capital, without the IRS getting in their way.
Overview
The Small Business Jobs Act will ultimately raise the general reporting thresholds for services rendered by independent contractors and subcontractors from $600 to $5,000, adjusting for inflation. This will be effective for payments that were made after December 31st, 2023. When it comes to reporting goods & services that are rendered online, that threshold has been raised from $600 to $20,000. Another interesting aspect of this bill is that the term “standard deduction” has been replaced with “guaranteed deduction”. Under the bill, the guaranteed deduction amount will increase by $4,000 for people filing jointly and a $2,000 increase for individual returns.
Statements From Congress
Jason Smith is the chairman of the House Ways and Means Committee. The Republican from Missouri voiced strong support for the recently passed act. In a statement earlier this week, Smith said, “Main Street has struggled in the Biden economy. We’ve heard directly from small businesses during our hearings around the country about the real challenges they face today. Their testimony exposed the painful reality that the economy under President Biden is harming small businesses”
While Chairman Smith is someone in support of the Small Business Jobs Act, there are also members of the committee that have not been afraid to voice their disagreements. Richard Neal is a Democrat from Massachusetts and also a ranking member of the House Ways and Means Committee. Neal believes that this bill is a scam, and he went on to say, “This is the most ill-considered piece of legislation that I’ve witnessed in years in front of this committee. Just 10 days after our Republican colleagues were prepared to bring the nation to the brink of default to the precipice, if not over the edge, they now come back with a tax cut.”
Wrap Up
As usual in government, there are members of the House and Ways Committee on different sides of the aisle that have different feelings about the approval of the Small Business Jobs Act. Small Business owners should consider the passing of the bill a victory, as they will be free to grow their business, and not be burdened by the bureaucracy of the Internal Revenue Service.