small business tax compliance

How Section 179 Deduction Saves a lot of Taxes!

Section 179 DeductionFor small business , section 179 deduction is great !The Tax Cuts & Jobs Act has amended depreciation rule under section 179 of the Internal Revenue Code to allow the claim of $1,000,000 of depreciation from $ 5,00,000 allowed earlier.Even the bonus depreciation is now 100 percent. The TCJA has further increased the equipment purchase limits to $2.5 million. 

What is IRC Section 179 ?

Section 179 deduction is basically claimed of depreciation in one year . Simply put, Internal Revenue Code allows a business person to claim 100 % of expense on certain types of capital expenditure i.e on buying assets for use in business. This is unlike other capital assets where the full depreciation is not allowed. So section 179 expense has a direct effect on lowering your business profit and consequently results in huge savings on tax payments.For example, if you buy a car for $ 50,000 for business purpose and immediately used, you can claim $ 50,000 as the deduction under section 179 by opting and attaching the form 4562 with your tax return.Read More »How Section 179 Deduction Saves a lot of Taxes!

Form 944 to Simplify Tax Filing for Small Business Owners

Form 944Form 944 is a great step to reduce the compliance burden for the smallest employers. As you must be aware that an employer is required to withhold taxes from employee wages, then file and deposit the payroll taxes. After that, company employer is required to file quarterly federal payroll and income taxes. Now, very small businesses (read employers) can file FORM 944 just once a year and save themselves from year-rounded compliance burden under Internal Revenue Code.  You will see that the Form 944  , a simplified employers annual tax return , indeed asking for very little details as under:

  • Employer Identification Number
  • Employer contact information
  • Employee wages, tips, and other compensation
  • Federal income tax withheld
  • Taxable Social Security and Medicare wages
  • Adjustments
  • Deposit information

Read More »Form 944 to Simplify Tax Filing for Small Business Owners