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2015 Tax Provisions for Businesses: A Review

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taxesWhether you file as a corporation or sole proprietor here’s what business owners need to know about tax changes for 2015.

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Standard Mileage Rates 
The standard mileage rates in 2015 are as follows: 57.5 cents per business mile driven, 23 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations.

Health Care Tax Credit for Small Businesses 
Small business employers who pay at least half the premiums for single health insurance coverage for their employees may be eligible for the Small Business Health Care Tax Credit as long as they employ fewer than the equivalent of 25 full-time workers and average annual wages do not exceed $51,600 (adjusted for inflation).

In 2015 (as in 2014), the tax credit is worth up to 50 percent of your contribution toward employees’ premium costs (up to 35 percent for tax-exempt employers). For tax years 2010 through 2013, the maximum credit was 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities.

Section 179 Expensing
An extension for increased limitations for Section 179 expensing along with an extension of the bonus depreciation was included in HR 5771, Tax Increase Prevention Act of 2014, which was signed into law last year, on December 31, 2014 but expired at the end of 2014 and has not been extended.

As such, in 2015 the maximum Section 179 expense deduction for equipment purchases is $25,000 of the first $200,000 of certain business property placed in service during the year. The bonus depreciation of 50 percent for qualified property that exceeds the threshold amount is no longer available. Please call us if you have any questions about Section 179 expensing and the bonus depreciation.

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Work Opportunity Tax Credit (WOTC)
An extension for the WOTC was included in HR 5771, Tax Increase Prevention Act of 2014, but expired at the end of 2014 and has not been extended.

SIMPLE IRA Plan Contributions
Contribution limits for SIMPLE IRA plans increased to $12,500 for persons under age 50 and $15,500 for persons age 50 or older in 2015. The maximum compensation used to determine contributions increases to $265,000.

Please contact a professional to understand which deductions and tax credits you are entitled to.

The founder of Richard L. Lipton CPA & Associates LLC, located in Morris Plains, N.J., Richard has been a stockholder and manager of family-owned Sam’s Tire Co. in Paterson, N.J., for 10 years. His firm offers business consulting, tax and accounting services – including the area of forensic accounting – to large and small clients. Visit Richard L. Lipton CPA & Associates LLC online at www.liptoncpa.com.

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