Are You Up to Date on Changes to Small Business Tax Deductions, Credits & Other Changes?

By Margot Lester, Staples® Contributing Writer

Published January 15, 2016

There’s so much to keep up with when it comes to small business taxes, it’s no wonder we can get a little wiggy about tax time.

“I imagine the scariest thing about doing small business taxes would be either A. the fear of doing it wrong and getting hit with a penalty or an audit, or B. the fear of missing out and paying too much,” says Matthew Illuzzi, CPA, president and founder of New Day Business Advisors in Apex, NC. 

To make tax season a little less scary, we compiled a quick overview of some of the changes to small business tax deductions, credits and other federal tax code sections that may impact your business for tax year 2015. Discuss these updates with a tax professional before you begin preparing your 2015 tax forms:

  • Payroll Tax Form Deadlines.Payroll tax forms W-2, W-3 and 1099 are due earlier ––January 31, 2016,” explains Sandra Gohlke, CPA and principal at Rehmann Robson in Troy, MI. “The IRS has been aggressive about assessing penalties,” Gohlke says. “There are some rules to be aware of. Ignoring them can cost you.” If you use contractors, talk to your accounting professional to make sure you’re in compliance.
  • Leasehold Improvement Cost Recovery. A 15-year straight line cost recovery is available for qualified leasehold improvement property, qualified restaurant property and qualified retail improvement property, according to Elizabeth Moreau, CPA and tax partner in the Lafayette, LA, office of Broussard Poché.
  • Section 179 Depreciation Deduction. The Section 179 expensing up to $500,000 has been made permanent, enabling you to deduct the entire cost of certain purchases, such as equipment and furniture, in the year in which the purchases were made. Learn about other small business tax deductions.
  • “Bonus” Depreciation. Moreau says that this provision, extended through 2019, enables you to take “bonus” depreciation of 50 percent of the cost of property acquired and placed in service during 2015, 2016 and 2017; 40 percent in 2018; and 30 percent in 2019.
  • R&D Credit. The Research and Development credit was made permanent. “Small businesses can use it to offset alternative minimum tax,” Gohlke says.
  • Work Opportunity Tax Credit. This credit was recently expanded for hiring veterans and other targeted groups, Gohlhke notes. You can get a 25- to 50-percent credit on wages of $6,000, and as high as $25,000.

Keeping up with changes to small business taxes like these is a full-time job, which is why many owners leave tax preparation to the pros. Accounting and finance software makes it easy to keep your own books and records and to pass them over to your CPA at tax time.

“For a small business, it’s always worth it to spend money on a professional service that’s outside [your] realm of knowledge,” Illuzzi explains. “Spinning your wheels to try to do everything is counterproductive, whether it’s taxes or marketing or PR. Focus on what you are good at and do more of that. If you’re good at [your] business, you should be able to earn more money in the hours you would spend doing your taxes than it will cost you to have a professional do them for you. And you don’t have to try to figure it all out!”

Even if you decide to do it all yourself, a quick check-in with a tax professional ensures you avoid any miscues.

Learn more about small business taxes and helpful products in the Staples® Tax & Organization Center.

DISCLAIMER: This information is only provided for general informational purposes and should not be considered as offering individualized tax advice. Tax laws are complex; consult your tax advisor on specific issues related to your tax situation.

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