Owning a small business is no easy endeavor. In addition to the long hours and worries about making ends meet, business owners often find themselves attending to complex matters that are far outside of their comfort zone.
A good example is tax obligations. If you are a small business owner, you have likely felt the frustration and confusion caused by a tax code that is complex and ever-changing. Even determining how much you owe to the IRS and to the state of California can be a migraine-inducing exercise. Thankfully, one aspect of business taxation was recently simplified, and that's what we'll discuss in today's post.
Businesses can take advantage of depreciation-related tax deductions when they invest in necessary equipment. You probably already knew that. But if you have done this in the past, you also know that depreciation schedules can be confusing. It is often difficult and time-consuming to calculate depreciation year by year.
In December, Congress made an important change to the Section 179 deduction, making it far less complicated to invest in capital expenditures. Under the new rules, your business can spend up to $500,000 in new equipment and write it all off in the same year. Unlike other tax simplification measures, this one is both permanent and indexed to inflation.
The change to the Section 179 deduction is good news for most small business owners. But if you still spend far too much time and energy trying to understand your business' tax obligations, you may want to invest in some outside help. Specifically, you may want to hire both a tax law attorney and a certified public accountant. Thankfully, there are professionals who offer both services.