Tax Lowering Strategy
Tax extenders are a group of fifty tax breaks that apply not only to small businesses but teachers and individuals as well. What you need to be concerned with are those that apply directly to small businesses. While these tax breaks are temporary in nature, they can have a serious impact on how you conduct your business for the next year.
In 2013, these tax breaks actually expired on December 31st, but the United States Congress retroactively extended the tax breaks into 2014. They typically do this at the last moment of the year, or right after the first of the new year, making it difficult for small businesses to plan ahead. These tax breaks are also only renewed for one year meaning they will have need to extend them again before the end of 2014, so they can carry over into 2015.
Currently, the tax extenders for small businesses include such items as a work opportunity tax credit of $1,375, a 15-year straight line cost recovery for qualified leasehold improvements for restaurant and retail establishments of $2,382, and bonus depreciation of $1,492.
Additional tax extenders include:
- Exclusion of 100% of gain on certain types of small business stocks
- A reduction in the S Corporation recognition period for built-in gains tax
- Qualified zone academy bonds
- An employer wage credit for activated military reservists
- A new market tax credit
While not all tax extenders are good policy for the government or businesses, some of the tax breaks do help level the playing field and provide companies a way to define actual business expenses with less effort.
If you are tired of overpaying taxes, call 630-581-7007 or 708-687-2917 and ask for Michael Kimmey.
Michael Kimmey & Associates is a Tax and Accounting Firm operating for over 35 years. Our firm services small businesses and individuals throughout Chicago. Our offices are located in Oak Brook and Orland Park.