Small Business Tax Deduction Alert – With the 2013 business tax deadline fast approaching, it is important to be aware of those tax breaks that are available to help your business reduce its overall tax liability. In any given year, the use of tax deductions, tax credits, tax exemptions and tax incentives can significantly reduce the tax bill that your business will have to pay. On the flip side, to overlook these tax breaks essentially means that your business will overpay its tax bill.
The following is a list of some of the small business tax breaks that are available for 2013:
- The Home Office Deduction – If your home is your principle place of business and you use a certain part of your home exclusively for this purpose, then you are eligible to claim a home office deduction. As of 2013 there are two methods for claiming this deduction. The regular method involves keeping a record of the actual expenses incurred in maintaining the home office (such as utilities, insurance, repairs and depreciation) and combining these expenses with the percentage of the home that is used for business. The simplified version allows a qualifying small business taxpayer to simply multiply the square footage of the home office space by a preset rate obtained from tables published by the IRS.
- Deduction for the Purchase of Software and Equipment – Businesses are allowed to deduct the full cost of the purchase of furniture, computers, other business equipment, company vehicles and business software up to maximum of $500,000 as long as the items were placed into use before the end of 2013.
- Bonus Depreciation Deduction – A special bonus depreciation deduction allows businesses to deduct 50% of certain new assets that were placed into use before the end of 2013. This 50% bonus depreciation is allowed in addition to the standard depreciation amount. An important aspect of this bonus depreciation provision is a first year depreciation deduction of over $11,000 (depending on the type of vehicle) allowed for vehicles purchased during 2103 and used exclusively for business. This deduction is reduced proportionally if the vehicle is used less than 100% but more than 50% for business.
- Health Care Tax Credit – Businesses who have fewer than 25 employees earning an average annual wage of less than $50,000 can claim a tax credit of up to 35% as long as they contributed at least 50% toward their employees’ health insurance premiums.
Don’t overpay your tax bill! Because of the complexity of tax law, especially as it applies to business, it may be advisable to consult a qualified tax professional to ensure that your business doesn’t miss any of the credits or deductions which it is due.
If your business is seeking business tax or business accounting solutions, our experienced professionals can provide you with the expertise you are looking for. To learn more about our full range of business tax and accounting services, visit us today at www.businesstaxpreparation.com. Contact us by email at info@businesstaxpreparation.com or by phone at (866) 676-9417 to receive a free, no obligation consultation.