Okay, so it is that time of year again. We at White Mountain Accounting Show Low, AZ have pulled our capes out of the closet and transformed into tax super-hero mode! Now, we know it is not necessarily as exciting for you as it is for us, but let’s not make it such a chore this time around. Here are some helpful tips for you to consider:
In preparation for the April 15 tax deadline, Business News Daily consulted small business tax experts to find out what business owners should be paying attention to now. Some of these issues involve recent tax changes, while others are issues small businesses should be watching for the future.
Two important tax breaks for small business have been extended. They are Section 179 and bonus depreciation. Section 179 allows businesses to deduct the full price of any qualifying equipment or software purchased or leased during the year. The tax-extension bill continues the $500,000 maximum deduction for new and used equipment that was purchased in 2014. Bonus depreciation allows business owners to depreciate 50 percent of the cost of new equipment purchased in 2014. The two tax incentives can be used together.
Although the act’s passage was a relief for business owners who purchased equipment in 2014, many others had to scramble to make equipment purchases in the final two weeks of the year or missed out on purchases while waiting for Congress, said Miguel Farra, chairman of the tax and accounting department at public accounting firm Morrison, Brown, Argiz & Farra LLC.
Also, because the incentives were extended only through the end of 2014, small business owners have no way to know whether these purchases will apply to business purchases made in 2015 until much later this year, said Dennis Brager, of Los Angeles-based Brager Tax Law Group, which specializes in helping companies that are in tax trouble.
Shelling out a substantial percentage of the year’s income is stressful enough, but tax season also brings with it a great deal of complexity and confusion. Tax laws are constantly changing and being revised, and it can be difficult for small business owners to keep up. And what adds even more stress to tax filing is that even innocent mistakes or oversights can lead to big penalties. [ Read More …]