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!