There are many key deductions and credits that your business should look to take advantage of in the coming year. Many of them have been extended through the year 2019. If you aren’t taking advantage of them, now’s the time! If you are already using these tax breaks, continue to do so (until at least 2019).
Even though some of these changes have been known for some time, it’s still important to revisit them and be aware of them this time of year.
- Section 179: Section 179 expensing is now permanent. Items like off-the-shelf computer software have also been added to the list of qualifying property. Your business can take the full cost of qualifying equipment in the first year, as long as it is placed into service in the same tax year and is used more than 50% of the time for business. This extension applies to both used and new equipment.
- Bonus Depreciation: This tax break allows businesses to deduct 50% of the costs for new capital equipment when it’s purchased. This 50% deduction will remain in 2017 but will decrease to 40% in 2018, and a subsequent 10% decrease will reduce the deduction to just 30% in 2019. Bonus depreciation will expire without any additional Congressional action by 2020.
- Work Opportunity Tax Credit: This tax credit incentivizes employers to hire certain long-term unemployed individuals, such as military veterans. The extension added a 40% credit up to the first $6,000 in wages for employers who hire workers that have been out of work for at least 27 weeks.
- Research and Development Tax Credit: Businesses that make less than $50 million annually and invest heavily in research can now apply this tax credit to the Alternative Minimum Tax (AMT) or possibly even offset payroll taxes.
Which tax credits are you currently taking advantage of? We’d love to meet with you to make sure no money is left on the table when it comes to your business. Give us a call! Josh Sweat Authentic Jersey