Whether you just successfully launched your own startup or have been running your small business for years, there is a lot of pertinent information that you must stay up to date on, from projected revenue and expenses to business codes and permit laws.
Now, in light of our nation’s most recent transition of power, there are tax law changes abound, with the promise of more looming on the horizon. Until then, however, take a moment to read over the most recent tax law changes that will likely affect you and your small business.
Tighter filing deadlines.
Depending on your company’s classification, you may be faced with tighter deadlines when it comes to file your 2017 returns. For example, companies classified as S corporations must submit partnership returns on March 15 as opposed to April 15, which was the previous due date. You can find the full list of deadline changes here.
Extended eligibility for research & development credit.
Thanks to the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), organizations in a myriad of industries – construction, software, manufacturing, aerospace subcontracting, wine, and biotech – can now qualify for research & development tax credit.
The only requirements for this program are that each organization have supervisory engineers, scientists, a product development team, or software that can be sold to the public.
Greater tax breaks on equipment purchases.
Also known as bonus depreciation, this tax rule allows companies to claim investments, such as new equipment, as expense deductions. For the 2017 tax season, the maximum that could be claimed was $510,000. In 2018, this number is expected to drop by 10 percent, followed by another 10 percent decrease in 2019. So, if you are planning to invest in up-to-date equipment, it is best to do so sooner rather than later.
In years past, individuals involved in a partnership were personally liable for any and all tax collection associated with an audit. With this latest law change, the responsibility is off the individuals and placed on the partnership as an entity. This will have a significant impact on how partnership interests are valued and transferred, so be sure you understand the ins and outs of this particular change before even considering entering a partnership.
Overall, these tax law changes are complex and confusing in nature, therefore, it would be in your best interest to stay in close contact with your tax advisor. Otherwise, you may find yourself lagging behind, likely feeling overwhelmed, when it comes time to file next year.