Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Tree Tax Deductions Small Business Owners Should be Aware of

Author: Scarinci Hollenbeck, LLC

Date: December 22, 2016

Key Contacts

Back

The U.S. tax system can be pretty complicated, especially for small businesses.

small business tax deductions

The U.S. tax system can be pretty complicated, especially for small businesses. According to the Tax Foundation, enterprises across the nation spend 2.8 billion hours annually filing business income tax returns. This doesn’t include S Corporations, the employer’s quarterly federal tax return, sales of business property or other taxes organizations have to pay. Working with tax, trust and estate attorneys not only reduces the amount of time you have to spend filing tax returns but also allows you to identify opportunities to keep some of your hard-earned cash. Below are three tax deductions you might be able to take on your next filing:

     1. Deduct equipment and software costs

Section 179 of the Internal Revenue Code allows a deduction for the full purchase price of certain equipment and/or software you bought or financed during the tax year. While many purchases are deductible under Section 179, you won’t be able to claim this benefit for every piece of equipment you purchase. However, the deduction decreases on a dollar-for-dollar basis if you’ve placed more than $2 million of Section 179 property in service during a taxable year. Listed below are several items that qualify for the deduction

  • Business vehicles with a gross weight greater than 6,000 lbs.
  • Computers and “Off-the-Shelf” software
  • Machines for business use
  • Office furniture and equipment

     2. Vehicle usage 

This particular deduction applies to you if you’re the sole proprietor of a business and use your personal vehicle in your day-to-day operations. If you use your automobile for both personal and business purposes, you need to divide the mileage accordingly. You should keep record of any business miles you drive each year in the event you need to verify this information with the IRS. You can refer to the IRS’ standard mileage rates document and Publication 463 for more information. 

     3. You’ve hired your child

If you employ one or more of your children who are under the age of 21 years, you won’t have to pay social security and Medicare taxes associated with their income if you own a sole proprietorship or participate in a partnership with your child’s other parent. The Wall Street Journal noted this can add up to $15.30 in savings for every $100 you pay your kids.

Obviously, there are more than just these three deductibles. If you want to learn more about how you can save money on your tax returns, if you have any questions, or if you would like to discuss the matter further, please contact me, Jeffrey Pittard, at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Dissolving Your Business: Essential Legal Steps to Protect Your Interests post image

Dissolving Your Business: Essential Legal Steps to Protect Your Interests

If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]

Author: Christopher D. Warren

Link to post with title - "Dissolving Your Business: Essential Legal Steps to Protect Your Interests"
The Role of Corporate Restructuring in Mergers & Acquisitions post image

The Role of Corporate Restructuring in Mergers & Acquisitions

Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]

Author: Dan Brecher

Link to post with title - "The Role of Corporate Restructuring in Mergers & Acquisitions"
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public post image

Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public

Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]

Author: Bryce S. Robins

Link to post with title - "Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public"
Understanding Chattel Paper: A Key Component in Secured Transactions post image

Understanding Chattel Paper: A Key Component in Secured Transactions

Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]

Author: Dan Brecher

Link to post with title - "Understanding Chattel Paper: A Key Component in Secured Transactions"
Crypto Compliance: A Comprehensive Guide post image

Crypto Compliance: A Comprehensive Guide

For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]

Author: Bryce S. Robins

Link to post with title - "Crypto Compliance: A Comprehensive Guide"
Supreme Court and Title VII: Implications for Reverse Discrimination post image

Supreme Court and Title VII: Implications for Reverse Discrimination

Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]

Author: Matthew F. Mimnaugh

Link to post with title - "Supreme Court and Title VII: Implications for Reverse Discrimination"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!