The filing deadline for filing taxes is fast approaching. Small Mid-Size Business Enterprises (SME) need to be aware of all the deductions afforded to them by the tax code.
Our friends from Balboa Capital sent us this reminder about the Section 179 Tax Deduction...
...There have been a lot of questions surrounding the Section 179 deduction for 2014*
…According to the IRS, the Section 179 tax deduction limit as of January 1st 2014 is $25,000. This is a sharp drop from last year's limit, but it still presents you with an opportunity to deduct a certain amount of your equipment, technology and software purchases when it comes time to do your business taxes. This means you can buy or lease up to $25,000 worth of equipment and deduct its cost in 2014, providing you place it into service this year. You may also elect to use Section 179 with more than one piece of equipment, as long as the total deduction amount does not exceed $25,000…”
For a small business owner this is a significant tax savings. Think of what $25,000 can do for a small business owner? It is a significant capital contribution to the business. Effectively deployed it has the potential of funding a new business initiative (new software application, marketing program, delivery vehicle) or it can just as well cover a personal expense (think tuition payment for the kid in college) and this timely advice is well received.
As the tax filing deadline approaches it is important to keep in mind the various audit risk factors certain deductions raise with the IRS. In the past the agency has published guidelines agents utilize to risk profile tax returns. Claiming these deductions heightens the risk of an audit by the IRS. It is a critical that SMEs are aware of these audit risk factors and incorporate this intelligence into its risk management program.
Sum2 developed the IRS Audit Risk Program (IARP) to provide SME’s an audit risk road map to mitigate audit risk factors. IARP outlines focus areas of heightened agency scrutiny targeting specific issues that are reported on tax filings. IARP users gain the confidence and surety that audit risk factors are being effectively managed. Get Tax Audit Aware with IARP.
*Be sure to consult with your tax advisor for information on the Section 179 eligibility requirements that affect your business…
risk: tax code, tax audit, regulatory compliance, accounting, legal, Section 179
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