Although warmer weather is here, the end of the year will come around soon. For consumers, year’s end means getting ready for the holidays; for business owners, it means getting finances straight in preparation for tax season. There are many changes in store for the upcoming tax season, and some of these changes are very important for small business owners. Clients can discover more info here on some issues they may want to discuss with your Tax Preparer in Brooklyn.
The Affordable Care Act
The ACA should be the top item on the business tax agenda, especially if a company employs more than fifty people. The government started enforcing this mandate in 2015, but enforcement has been pushed back to 2016 for some employers. A business owner should discuss the Affordable Care Act with a Tax Preparer in Brooklyn if he or she is not sure how the business will be affected.
Corporate tax rates are an important issue in many tax reform proposals. Companies structuring themselves as corporations pay more taxes than partnerships, LLCs and other business structures. If corporate tax rates are lowered, differently structured small businesses won’t get tax breaks unless personal tax rates are amended.
Reduced And Eliminated Deductions
A small business owner will be surprised to find that some tax credits have been reduced, or have expired altogether. Business owners can deduct the cost of assets such as furniture and equipment in the purchase year, rather than over an extended period. The limit was $500,000, but for the 2014 tax year, it dropped sharply to $25,000. The bonus depreciation credit ended back in 2013, and the work opportunity credit has ended as well.
Net Investment Tax
The 3.8% tax on investment income took effect in 2013, but some business owners have been taken by surprise. The tax applies mainly to high-income people with income from investments, such as stock portfolios, rentals and other forms of passive income.
As a business owner, what can be done to make things simpler when tax time rolls around? The first step is to ensure that business records are updated, and that financial papers are easily accessible and organized. By getting documents together early, a business owner can maximize the chance of being eligible for deductions.