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Small Business Taxes: Tips for 2015 and 2016

A search of the internet for last minute tax tips and planning for 2016 yielded the following. The first 2 come from Business News Daily by Adam C. Uzialko.

Small businesses have been crying out for consistency in the tax code, and for 2015 they got some. However, the 2016 elections could change that. Business News Daily consulted small business tax experts to find out what things business owners should pay attention to.

  1. Tax extenders – Two important tax breaks for small business have been extended: Section 179 and bonus depreciation. Section 179 allows businesses to deduct the full price of any qualifying equipment or software purchased or leased during the year. The tax-extension bill makes permanent the $500,000 maximum deduction for new and used equipment that was purchased or leased in 2015. Bonus depreciation, which was extended through 2017, allows business owners to depreciate 50 percent of the cost of new equipment purchased in 2015. The two tax incentives can be used together.Other notable tax extenders include the research and development credit, work opportunity tax credit, energy production tax credits, and a deduction for local and state sales tax.
  2. The Affordable Care Act – The main issue for many businesses is that they could face tax penalties for failing to provide health insurance to employees or for failing to report to the Internal Revenue Service what type of coverage they have provided.Since the start of 2016, businesses with 51 to 99 employees are required to offer health insurance to at least 70 percent of their full-time-equivalent employees or face a tax penalty of $2,000 per employee. They must report, on each employee’s W-2 form, the cost of the health coverage provided. A breakdown of what the employer and the employee each paid is also required. The IRS recently extended the reporting deadline to May 31, 2016, for paper filings and June 30, 2016, for electronic filings. For more tips, see Janemarie Mulvey’s book “Health Reform: What Small Businesses Need to Know Now!” at
  3. Business identity theft – Business fraudsters have realized they can generate larger refunds when they steal a business’s identity and claim business deductions and credits. It is estimated that over the next five years, the IRS could issue nearly $11.4 billion fraudulent tax refunds based on falsely-obtained Employer Identification Numbers (EIN).
    • For the cost of a $10 filing or processing fee, thieves may file a fraudulent change of your business address, or file changes to your business’ officers, directors or registered agent.
    • Thieves may identify a target business in one state, and fraudulently register that business as a foreign (out of state) business in another state.
    • Making a slight change to an established company name to be confusingly similar to the legitimate company’s name in order to deceive creditors, financial institutions, and other businesses. For example Anderson Petroleum, LLC vs. Anderson Petroleum, Inc. For tips on how to protect your business go to

Written by Keith Larson

Keith is 1 of 6 experienced SCORE volunteers providing FREE business counseling at the new Murrieta Innovation Center 26442 Beckman Ct. To make an appointment, send an e-mail to or visit the SCORE website at Join Keith and other Murrieta-area business owners at a FREE monthly Business Roundtable, held 3rd Wednesdays from 8:00 to 9:00 a.m. at the Innovation Center.

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