4 Small Business Tax Changes to Know for 2015

Running a small business is difficult enough by itself, but add on the burden of navigating tax codes and it can get overwhelming fast. It certainly doesn’t make it easier when tax laws change, as was the case when the PATH Act was signed into law last year.

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Although these changes enacted by this law are mostly positive for small businesses, they make it necessary to pay even greater attention as you prepare your taxes this year.

But we’re here to help. Here’s a list of the most important changes to watch out for:

1) Extended Tax Breaks – The PATH Act extended two important tax breaks for businesses. One is an ability to deduct the entire price (up to $500,000) of qualifying equipment or software purchased in the past year. The other, called bonus depreciation, allows business owners to depreciate 50% of the cost of equipment they purchased in the past year.

2) R&D Credit – If you own a small business with under $50 million in average gross receipts, you’re eligible for the R&D tax credit. Created to encourage businesses to engage in more R&D, this credit allows businesses that are losing money to offset income and payroll tax liabilities with a benefit against employer social security, Medicare and Federal unemployment tax liabilities. State and local R&D credits can vary. Check South Carolina’s regulations carefully – some offer great value.

 3) Employees or Contractors? – This year, it’s more important than ever to correctly classify workers as employees or contractors. Employers who incorrectly classify full-time employees as contractors will face huge penalties. If you’re not sure if your employees are in the right category, you can submit a form to the IRS and they’ll help you determine the proper classification.

4) Affordable Care Act – As of 2016, businesses with 51 to 99 employees must provide health insurance for at least 70% of their full-time staff or pay a penalty of $2,000 for each employee. Also, employers who fail to report the type of coverage they’re providing for their employees will face an additional tax penalty.

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Whatever your needs may be, Countybank has a wide range of customized banking solutions for South Carolina businesses. Give us a call at 864-335-2400.

Note: “Fresh Ideas” are published each week by Countybank and its family of financial service companies. With financial centers in Greenville and Greenwood, Countybank has a team of highly engaged professionals ready to bring a full scope of financial solutions designed to help families and business owners reach their goals.