For the small business owner, a tax break can mean a little savings that go back into their pockets and not to the IRS. Buying new computers, printers or machinery that they have postponed buying, can mean that their productivity level might increase thus giving them a better year overall. Some of the “Tax Breaks” for the small business owner are so minimal that they do not impact their well being or the well being of their business, let us hope some of these tax breaks can affect them positively this coming year.
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Small Businesses Get a Permanent Tax Break on Buying Equipment
Tucked inside the mammoth tax and spending bill passed by Congress this month is a much-anticipated provision that will lock in a large tax break for small-business capital investments that has been temporary until now.
The break is intended to make it more affordable for small companies to buy up to $500,000 a year worth of equipment like computers, machinery and vehicles.
Known as the Section 179 deduction, the tax provision allows qualifying capital items to be written off immediately on a business’s taxes, instead of being depreciated over a number of years. That has the effect of lowering a business’s taxable profits, sometimes significantly.
The deduction is essentially limited to small and midsize companies. It begins phasing out when a company spends more than $2 million a year on qualifying purchases, and is eliminated entirely for those that spend more than $2.5 million.
Small Businesses Need to Act Fast to Get This Huge Christmas Present
But the new “section 179” deduction limits will last into 2016 and beyond
The bigger deduction, aimed at stimulating the economy, covers computers, furniture, vehicles and machinery. Under the provision, small business owners can deduct the full purchase price in the year they bought it.
“It’s one of the most immediate, tangible things most small businesses do in some form,” said John Arnsmeyer, founder and CEO the Small Business Majority, a network of 42,000 small business owners. “It has a very immediate benefit for them.”
Small Business “Tax Holiday” Could Be In The Works
TALLAHASSEE (CBSMiami/NSF) – A Senate Republican has proposed creating a sales-tax “holiday” for small businesses on the Saturday afterThanksgiving
, one of the busiest shopping times of the year.
The bill, filed by Sen. Rene Garcia of Hialeah, is similar to a measure filed last month by Rep. Jay Fant of Jacksonville, and Rep. Ed Narain of Tampa.
The bills, which will be considered during the upcoming legislative session, would create a “Small Business Saturday” tax holiday on Nov. 26 next year. If approved, small businesses would not be required to collect sales taxes on items priced at $1,000 or less.
Lawmakers considered such a proposal during the 2015 session, but it did not get approved in a final tax package.
The News Service of Florida contributed to this report.
