It's that time of year again to shuffle through paperwork and get organized for filing your taxes. There have been a few Tax updates I ran onto and thought I would share them with you.
The maximum allowable deduction for equipment put into service under Section 179 increases to $108,000.
The standard mileage rate for the cost of operating your car, van, pickup, or panel truck for business is now 44.5 cents for all business miles driven.
Businesses may receive a 30% credit for the installation of solar heating and fuel-cell equipment.
Small businesses with no more than 100 employees will receive a credit of up to $500 per year against the cost of the first three years of a new pension plan.
Companies with more than one employee that manufacture or produce tangible property in the U.S. may be able to deduct 3% of income from their production activities.
The maximum amount of wages subject to the Social Security tax increases to $94,200.
The self-employment tax rate on net earnings is 15.3%, which includes 12.4% for Social Security and 2.9% for Medicare.
Employers and employees will pay 6.2% for Social Security tax and 1.45% for Medicare tax.
Be sure to discuss these changes and others with your tax professional or advisor.
Maximizing your Business Tax Savings
Don't pay more than you have to this tax season. Look over these commonly missed deductions. Then take full advantage of the tax breaks you may be eligible for as a business owner or self-employed entrepreneur.
Auto expenses for actual miles driven or for all actual expenses related to business, including gasoline and repair costs
Home office expenses
Bank charges related to business
Interest and fees on business debt
Interest on credit card debt — card must be used for business only
Taxes such as sales tax on business purchases and real estate tax on business property
Ongoing costs of doing business, including utilities, shipping, office supplies, advertising, and marketing (including sponsorships), rental or lease payments (property and equipment)
Telephone and Internet charges
The purchase of office equipment, furniture, and business vehicles
Professional fees (legal, accounting/bookkeeping, architectural, business consulting, and marketing consulting)
Seminars, classes, educational tapes or CDs, and conventions
Trade-related journal subscriptions, books, and other literature
Losses from theft, fraud, and business-property/contents damage not covered by insurance
Uniforms and cleaning — as long as the garment is used for no purposes other than business, you may be able to deduct some of the purchase and cleaning costs
With so many deductions available to you, it is critical that you keep accurate records to save as much as possible on your taxes. It's always nice when this season is over, but if you go into doing your taxes educated with the updates it will make it less stressful.