New 2013 Tax Law Change Gives Small Business Some Reason To Celebrate.
After all the hand wringing and “confrontation politics” around the fiscal cliff negotiations, there may be some things in the 2013 tax law changes that bring relief to small business.
Now Congress has finally pinned down the details of the 2013 tax laws, there are three of the last-minute provisions that small businesses can take advantage of now:
- Equipment, vehicle, fixtures, and furniture assets under Section 179 were about change to the previous level of $25,000. Fortunately for small and medium businesses, for 2013 Congress re-established the $500,000 limits for tax years 2012 and 2013. The intended effect is to stimulate economic growth. Bonus depreciation also about to expire, but that also was renewed through 2013.
- The Work Opportunity Credit has now been extended through 2013, available to employers who employ workers from certain specific groups. To take advantage of the WOC, owners generally must request and obtain a certification issued for each employee from the state employment security agency (SESA). Certification will confirm that the employee is a member of a targeted group. This certification must be received by the first day the individual begins work or by completing Form 8850, Pre-Screening Notice and Certification Request for Work Opportunity Credit, either on or before the day a job is offered. The group of individuals who qualify for the WOC include Temporary Assistance for Needy Families (TANF), employees affected by Hurricane Katrina, long-term family assistance recipient, permitted or unemployed veterans, ex-felons, SNAP recipients, those designated as community residents, vocational rehabilitation referrals, summer youth employee, SSI recipients, or at-risk youths.
- Also extended through 2013 are Research Credits and production tax credits. This tax change, according to the IRS, refers to qualified research for “research for which expenses may be treated as section 174 expenses. This research must be undertaken for discovering information that is technological in nature, and its application must be intended for use in developing a new or improved business component of the taxpayer. In addition, substantially all of the activities of the research must be elements of a process of experimentation relating to a new or improved function, performance, reliability, or quality.”
Many of these rules surrounding the tax changes for this credit, among others, should be checked with a tax professional.
What do you think of the 2013 tax changes? Is it too much, too small or just about perfect for your business? We want to know! Let us know in the comments!