Business Tax Deductions
Thursday, Dec 22, 2016
There a number of ways to lower your tax liability for your small business. Here is one of the most common ones, under Section 179 of the Internal Revenue Code, you can currently deduct up to an annual threshold amount of the cost of equipment (including your credit card processing terminal or POS systems) and certain business assets you purchase or place in service that year.
There are exclusions to these deductions and the limit was set at $500,000 in January 2015. This does not include any inventory that was purchased for resale, property bought from a relative, or real estate.
What that means in simple terms, is that any equipment that you purchase or lease and use to help run your business, can lower your tax liability that year. If you decided to lease a new credit card terminal in November 2016, and the lease won’t end until 2020, you will be able to utilize part of the total lease amount (for the complete 4 years) just for 2016. Please refer to your tax advisor for the exact amounts that will be deducted.