Even Small Business Owners Need a Corporate Tax Accountant

As a small business owner, you probably already know all too well that tax laws can be confusing and are ever-changing. To help make things easier on you, we’ve provided a comprehensive listing and explanation of some of the most important tax deduction changes affecting small business owners this year. However, do keep in mind that, as a business owner, you need to be working with a corporate accountant who understands your business, its needs, and its unique structure, and who can help you to make the most of your deductions.

Change #1: Section 179

Section 179 of the United States tax code is a wonderful thing for small business owners. For years, it has allowed them to deduct the complete and total price of certain equipment or software purchased or financed to assist in their business dealings.

However, the tax law is changing this year, and the new law states that busi

nesses can only deduct up to a certain amount of the cost of such equipment or software as a business expense. While the limit used to be a hefty $500,000, it is now only $25,000.

That’s quite a large drop, so be aware of this change and work with your accountant to make sure you’re within the limits on your equipment or software purchases. If you’re not, your accountant may know some legal workarounds that can still help you to deduct and save within the bounds of federal tax law.

Change #2: Research and Development Tax Credit

An important part of any business’s growth and success is its willingness and ability to conduct comprehensive research and apply that research to growing itself and potentially expanding. The government understands this and, because it wants small businesses to succeed and therefore benefit the economy as much as possible, it has henceforth offered a research and development credit that allows these businesses to deduct any relevant costs.

Unfortunately, though, the IRS has found that many people were misusing and abusing this credit and has thus discontinued it. This is very sad news for many small business owners, but with the right accountant and advisor, you can find other deduction and credit options to help cover part or even some of your research and development costs.

Change #3: S Corporation Provisions

They say bad things come in threes, and unfortunately, this third one on the list relates to companies that have been designated as “S Corporations.” If your business falls under this heading, you’ll find that, this year, you’re no longer allowed to deduct certain charitable contributions, including contributions of appreciated property, built-in gains, and food.

Again, though, there is a positive side. If you speak with your tax advisor soon, you can find “workarounds” so that you can still save. In fact, there are ways around just about all of these changes, providing that you have the right professional help and advice.

Wednesday, December 9, 2015