Shedding Light on the New Small Business Tax Rates

Tax laws are always changing. You need to be aware of the new tax laws so you can be sure to take advantage of new tax breaks and deductions for your business. The information included in this article will elucidate some of the new tax rules coming up.

Tax Breaks Extended

Two important tax breaks for businesses have been extended. The breaks that got extended are Section 179 and bonus depreciation. Businesses will be allowed to deduct the full price of software or equipment which was purchased or leased during the year as long as it meets qualifications. The maximum deduction allowed is $500,000.

The bonus depreciation was extended through the year 2017. It allows business owners to depreciate 50 percent of the cost of new equipment that was bought in the year 2015. Businesses will be permitted to use both of these deductions simultaneously.

These are not the only things which were extended. The work opportunity tax credit, the research and development credit, the credit for local and state sales tax, and the energy production tax credit were all extended. These extensions mean that small business owners can invest more in their business with new equipment.

The Affordable Care Act

The Affordable Care Act will affect some small business owners. It will depend mainly on the number of employees you have. If you have 51 to 99 employees, you will be responsible for providing at least 70 percent of your full time employees with health insurance. You could face a hefty fine if you don’t comply. Your tax penalty would be $2000 per employee if you don’t follow this policy.

These new rules can both help and hurt your business. The extension on the tax credits could put more money in your pocket while the health care rules could result in more paperwork. Be sure to talk to your accountant to see how these new rules will affect your business.

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