Most of the small businesses in America have lean operations where people have very little chances to make mistakes. That means these small businesses have to act on their own during the tax times. From the researches, it has been identified that many small business owners do not have a proper idea on filling the paperwork related to Internal Revenue Services and the tax breaks that they are eligible for. There are common small business tax breaks in 2013 for many enterprises and this article will let you know about some of them.
Startup costs: Since 2004, the small businesses in America were given the opportunity to deduct $5,000 from business startup expenses. When the President initiated the Small Business Jobs Act, he raised the amount to $10,000.
Healthcare and tax credit: The healthcare and tax credit provides tax breaks to small business owners with 25 or less employees. However, the business owners should pay an average salary of less than $50,000 to the employees while paying half of their health insurance premiums.
Bonus Depreciation: Over the past few years, this little tidbit has been passed over to the business. It allow the businesses to write off up to 50 percent off from the cost of furniture, machinery, vehicles and other equipment.
Loan Interest: Loan Interest can be considered as one of the largest breaks that a small business can receive. The use of credit is common because many businesses have an unreliable cash flow. However, the business owners should be careful in order to keep all the records of the cash flow. For instance, the business owner should be able to define how the expenses were used for business oriented purposes.
Marketing Expenses: The small businesses try hard to increase their brand awareness through promotions. All the efforts that are taken to enhance brand awareness through marketing is tax deductible. This applies for purchasing signage, printing business cards and even sponsoring a sports team with your logo on their jerseys.
Legal and consultancy fees: The tax code is specifically designed in order to provide breaks on legal and consultancy fees. These expenses are fully deductible, even if your lawyer is drawing up a contract or your accountant is doing your taxes. The small business owners should spread their deductions over the life of benefit in order to bear fruits in future years.
Bad debt and theft: Dealing with shoplifters and deadbeat customers can be considered as one of the hardest things that a small business owner will face. Fortunately, the IRS is willing to offer a break when these things happen. If a person walks away without making the payment, you can write the amount for physical goods and request for the tax break.
All the business owners should make their deductions look realistic. If the expenses are legitimate and if you have support, you can go to have them.