Tax Changes You Should Know About

Tax laws are known for changing quite frequently. In fact, there are changes almost every tax year, and 2016 is definitely no different. While there were many changes this year, some are definitely bigger and more likely to affect average people than others. Here, we’ve outlined some of the more major changes that you should be aware of.  

  

A Permanent Business Break: Section 179

As of 2016, under section 179, businesses can get a break on up to $500,000 worth of equipment that they’ve purchased for their businesses- pretty impressive, right?

Up until now, Congress has had to approve this break and its limit, but, as of this year, it’s permanent, so if you own a business, you can bet on this break for good!

                                     

Big Penalties for Not Offering Affordable Health Insurance

While, as of this year, businesses can benefit under Section 179, they may also end up suffering some serious consequences if they don’t offer affordable health insurance to their employees. Health insurance is now a required offering from businesses with fifty or more full-time employees.

Businesses that don’t obey the law could end up paying tens of thousands of dollars in fines! Penalties can be assessed when one of your employees get a tax credit for health insurance marketplace coverage or ends up spending a large chunk of his household income on health insurance because your business doesn’t offer it.

Don’t take these kinds of chances. Brush up on the new laws taking effect this year and then make sure you’re abiding by them fully.

Business Mileage Rates Plummet

If you drive a vehicle for work, then you probably already know that you can deduct mileage costs using the standard mileage rate set in place by the IRS. This is a great way to end up saving a surprising amount of money over time.

This year, however, business drivers and travelers won’t save quite as much. Unfortunately, the new tax laws have reduced the standard business mileage rate to fifty-four cents per mile, instead of last year’s 57.5 cents per mile.

The R&D Tax Credit: Now Permanent

The IRS-offered tax credit for research and development isn’t temporary anymore! It’s now a permanent offering, and it’s available to more businesses as well. From this year forward, companies that have been in business for fewer than five years and that bring in less than $5 million in revenue can use up to $250,000 worth of the credit. That’s good news for a great many businesses that have taken advantage of the credit in the past and for new ones that are just getting started and could use an extra boost of help!

Tax laws will probably never stay 100% the same from one year to the next, but as long as you stay on top of the changes, like these presented here, you should always come out on top!