If you are a small business, there are some big-dollar tax deductions that are set to expire in 2013 that you should be aware of and consider taking advantage of for the current tax year. You never know – you could buy more equipment, send less to the IRS, or even better – both!
Many professionals are working on year-end planning right now, setting up client meetings and making calls. During this time, it’s important to sit down with your accountant so they can help you identify and maximize deductions in order to save some money on taxes. Working now could help avoid having to file as many extensions.
So, which deductions should small businesses be looking at? Here’s the quick rundown;
- Section 179 deduction: write off dollar-for-dollar equipment purchases. For example, a business could buy a new truck, new machinery, or new servers and deduct the first $500,000 in costs for the 2013 tax year. Without an extension by Congress, the allowed first-year deduction drops to $25,000 in 2014. Now, note that real estate purchases aren’t covered by the Section 179 deduction; however, if you’re a tenant and you’re making certain leasehold improvements, you might be able to write off up to $250,000 of those expenses.
- R&D tax credit: another tax-related item set to expire in 2013 is the tax credit for research and development. It has been extended numerous times over the years, and it’s one that tends to get extended, sometimes retroactively.
- Another planning issue that small businesses should be looking at, if not already this year you’re your business structure. The impact of new taxes for 2013 that are part of the Affordable Care Act (including a 3.8 percent tax on net investment income, which can affect investors in a business, and a 0.9 percent tax on earned income) can be reduced if your business is structured as an S-Corp.
Navigating the tax mine field can seem overwhelming for an individual, but throw in your business and you could feel like you’re facing your doom! But, not to worry – as a small business owner you have more than just you in your corner. With William Wolske, CPA, you can get back to the job of running your business and generating profits while we tackle the business of Uncle Sam.
If you’d like to receive more information about our Tax Preparation Service, please contact us today! Simply make one phone call to us at 843.706.9644 and schedule a free consultation. We’ll go through it all together and have your peace of mind waiting on the other end.