As we head into the 4th Quarter of 2014, we can’t help but sit back and ponder where the year went! I’m sure many of you can agree! With so much to occur in 2014 still, we have less than 90 days before it’s 2015 and it’s too late to take advantage of any tax benefits or effective planning. Outlined below are some tax law changes, as discussed recently in the Business News Daily, which could impact you or your business.
1. The Affordable Care Act. This could change your company’s tax planning in many ways, especially if you have more than 50 employees or are getting pretty darn close. With enforcement beginning for most employers in 2015, there’s not much time left.
2. Corporate tax rates. Corporate tax rates are discussed day in and day out, and yet once again in the upcoming tax-reform proposals. Could tax rates be lowered for corporations in the near future? You never know, but this could be one of those tax changes that saves your company money. It’ll be worth the time to stay informed.
3. The reduction or elimination of tax credits. Tax credits don’t always last forever. For some companies that rely on a few tax credits, they could be on their way out sooner rather than later. For example, Section 179 gives business owners the ability to deduct the cost of a particular asset, such as equipment, in the year it was purchased as opposed to spread out over several years. Last year, the deduction limit was $500,000. In 2014, that number decreases to $25,000.
4. Tax extenders. This bill is intended to renew $85 billion in temporary tax breaks for businesses as well as individuals. With 50 tax breaks included in the bill, there is a good chance your company is benefiting from at least one.
5. Net investment income tax. This is not as much for companies, rather for high income individuals (such as some small business owners) that have a significant stock portfolio, real estate income, or other passive streams of income.
In 2013, the 3.8 percent net investment income tax was put into effect. This year may be the first time you are impacted by the tax.
Where do you stand on these changes? Waiting till the last minute to deal with these may put you in scrambling mode as the tax filing deadline closes in. Speak with an accountant at Prudent about these changes, ensuring that you are prepared and dealing with each on in the appropriate manner before December 31st, 2014.