Small businesses are again waiting for
Congress to make deductions on the bills that will affect their tax deductions.
Every year, many tax breaks expire while some are extended. When the time comes
to prepare and file taxes, small businesses use the various deductions and
credits allowed to them, which can potentially reduce their tax bill by
thousands of dollars.
Some of the tax deductions that small businesses
can claim without wait are the:
Section 179 Deduction
- Cost of transportation
- Expenses made in business advertising
- Expenses made on business
utilities and office supplies
- Expenses made on office repair
- Cost of starting a new business
in the first year
- Business entertainment expenses
- Travel expenses for business
The Section 179 deduction allows you to recover
all or a part of the cost of certain qualifying property by deducting it in the
year in which you place the property in service. You can choose to use the
section 179 deduction instead of using depreciation deductions to recover costs.
A property is eligible for this deduction if it is acquired for business use,
and was purchased. Other
qualifying factors also apply. The section 179 deduction has been minimized
from $500,000 in 2013 to a maximum of $25,000 for years beginning after tax
Deductions such as section 179 when added
with other deductions contribute to thousands of dollars of savings for small
businesses. Until lawmakers make the final decision regarding the extension of
old deductions and the creation of new, small businesses are stuck with their
2013 tax liabilities.
Even though it is frustrating for small
businesses to wait for the final word on certain deductions, the priority of
the lawmakers is to satisfy the federal budget and the tax code. To absorb this
uncertainty, small businesses make adjustments to their expenditures such as
postponing purchases, rebuilding and/or repair.
Labels: IRS, Tax Deductions, Tax Filing, Tax News, Taxpayers