2015 Small Business Tax Planning Tips
With 2015 coming to a close, it’s never too early to start thinking about filing taxes for the tax year 2015/2016. When next April comes around, you want to be completely up-to-date with the relevant legislations, rules and reforms that might have an impact on your business. With that in mind, we wanted to highlight some of the relevant changes for tax time 2016.
Change to IRS Standard Mileage Rate
If you or any of your employees use your personal car for business travel, you should know that the IRS standard mileage rate has increased. While you were entitled to deduct 56 cents per mile as a cost of operating a vehicle for business in 2014, in 2015 that amount has increased to 57.5 cents per mile. While an increase of 1.5 cents per mile might sound insubstantial, it can really add up for commuters or other professionals who regularly drive for business purposes. Alternatively, you can deduct your actual driving expenses, but for many people, using the standard mileage rate is much simpler, as the IRS factors in things like gas, repairs and maintenance, registration fees and insurance into their mileage rates.
The Affordable Care Act (ACA)
Also known as Obamacare, the act went into effect this year for businesses that have more than 100 full time employees, but smaller businesses will soon be impacted too. Starting in 2016, the Affordable Care Act will cover businesses with between 50 and 100 full time employees. If your business fits within that range, it’s important that you make sure you know exactly what’s required of you as a business owner. If your business has less than 50 full time employees you might even be eligible for tax credits or other benefits under the act, so check here to see what you’re entitled to.
Section 179 Bonus Depreciation Provisions
Under section 179 you’re able to expense the total cost of any equipment the business has purchased, in the year that it was purchased, rather than having to spread the cost using regular depreciation over a number of years. This could mean substantial tax savings, so be sure to look into how this could work for you, checking with your accountant if you’re not sure how your business fits in. It’s not just equipment that’s covered either. Some properties are also eligible for bonus depreciation, as well as qualified leasehold, retail and restaurant property improvements – which can be depreciated over 39 years for 2015.
Don’t forget that your state might have its own changes. You can find that information on individual state taxation via the IRS website. If you make sure you’re up to speed with everything that’s relevant to you as a business owner in time for filing this year’s taxes, you’ll find that tax time goes much more smoothly.
Simpler Expense Management
Spending too much time collecting receipts, controlling purchases and reimbursing employees? Get ahead of the game for an even smoother process for next year’s taxes – Bento’s prepaid business MasterCard is the ideal solution for streamlining business expenses. Employees use Bento cards and all expenses are tracked and controlled via a simple dashboard. Take a look and see why small businesses of all types are discovering Bento for Business as a must have small business tax planning tool.