(866) 303-9595 | (845) 764-9656
Se Habla Español 
   Facebooktwittergoogle_pluslinkedinyoutube    
Open/Close Menu World Class Attorneys, Hudson Valley Roots

Tax saving tips: As a Partner here at Jacobowitz and Gubits in New York and also a CPA, I work with individuals, business owners, corporations, municipalities and not-for-profits who all need to stay on top of the latest changes and proposals in tax law. Here are some tax saving tips for business owners that reflect the latest tax law changes for 2017:tax saving tips

  • In 2017, the filing deadline for “C” corporations will be April 15, whereas the filing date for fiscal year-end “S” corporations and partnerships will be March 15. The change is effective beginning with returns for tax year 2016.
  • The $500,000 deduction regarding equipment purchases of less than $2 million was made permanent. Instead of applying regular depreciation, your business can take the full cost of qualifying equipment in the first year, provided it is placed into service and is used more than 50 percent of the time for your business.
  • Under the Trump Administration, it is expected that the federal “C” corporation tax rate will decrease from 35 percent to somewhere between 15 and 25 percent.
  • For wage earners, the 7.65 percent tax for Social Security and Medicare will likely apply to income up to $127,200, up from $118,500. For self-employed persons, they will pay 15.3 percent on the first $127,200 of income they earn.
  • The Work Opportunity Tax Credit has been extended. This credit allows businesses to take a 40 percent credit up to the first $6,000 in wages paid to workers that have been jobless for at least 27 weeks.
  • Bonus depreciation has been extended through 2019. However, the amount that can be deducted will decrease each year from 50 percent.
  • President Trump has promised to “repeal and replace” the Affordable Care Act (ACA). Nevertheless, no later than March 2, 2017, an employer must prepare and submit Form I 095-C for 2016 for full-time employees who need them. As far as what will replace the ACA, the current speaker of the House of Representatives, Paul Ryan, has promised that a replacement plan for ACA will soon be introduced. Whatever plan Congress adopts, businesses having employees will do well to stay in close touch with their tax advisors in 2017 concerning this area of the law.

Here some additional tax saving tips for business owners to be aware of:

  • Business Expenses: You can deduct ordinary and necessary expenses that you pay to run your business. An ordinary expense is a common and accepted cost for that type of business. A necessary expense is a cost that is proper for that business. For example: barber shops, cosmetologists and food establishments are often required to get particular licenses, permits or certifications.  The cost of these licenses, permits and certifications are considered business expenses.
  • Depreciation of Assets: You can deduct, or depreciate, the cost of some assets. Depreciation is typically spread out over a number of years. For example, if you buy equipment and furniture, you can generally depreciate the cost of those items over seven years.
  • Report Tip Income: All the tips you receive are taxable income. If you have employees who receive $20 or more in cash tips in any calendar month, they must report them to you. You must withhold federal income, Social Security and Medicare taxes on the reported tips.
  • Estimated Tax: If you are self-employed, you may need to make estimated tax payments each year. If you do not pay enough tax during the year, you may owe a penalty. Use Form 1040-ES, Estimated Tax for Individuals to estimate the tax you should be paying.
  • Filing Payroll Tax Returns: If you have employees, you can take advantage of electronic filing options for your federal payroll tax returns. One widely used option is “IRS e-file”.
  • Keeping Records: Everyone in business must keep records. You must have good records to support the income, expenses and credits that you report. Good records can help you keep track of your business and increase the likelihood that your business will be a success. Good records can also help you defend against claims brought against you by the IRS, employees, customers, suppliers, or others that you do business with. You may wish to consider using QuickBooks or another similar computerized record keeping solution to simplify the work involved in keeping your business financial records.

It’s a new year with a new President and new tax changes that impact your business. Feel free to contact us for more information on tax saving tips or to review your business tax concerns.

Click here For Tax Saving Tips for Business Owners

mark-a-krohn-small

Mark A. Krohn, a partner, is in charge of the Business Law Team and is also a member of the Trust & Estates Team and is a CPA. He can be reached by phone at our Walden, NY office at 866-303-9595 toll free or 845-764-9656 and by email.

Facebooktwittergoogle_pluslinkedinmail
Credit Cards   

©2015 Jacobowitz and Gubits. All rights reserved.

Jacobowitz and Gubits Counselors at Law