FILE - A cash register is seen on the front counter at the Alpha Shoe Repair Corp., Feb. 3, 2023, in New York. As Tax Day, April 15, approaches, there are plenty of things small business owners should keep in mind when filing taxes this year.
But even if small business owners aren’t filing taxes themselves, it’s still important to stay informed about any tax changes during the year. Here are things small business owners should consider as the April 15 deadline looms. One reason Gerstein recommends an extension this year: a bonus depreciation write-off used by many small businesses is set to decrease for 2023. The bonus depreciation allowance was designed to spur capital purchases and it let businesses write off 100% of certain new and used assets in 2022. But beginning in 2023, that will decrease to 80% for used assets, dropping another 20% each year thereafter. However, a tax bill pending in Congress could restore the write-off to 100%.
In the past, companies were able to deduct 100% of research and development expenses from their taxable income. That was helpful because often that deduction meant the company was operating at a loss and wouldn’t have to pay taxes. “ are the ones who are swinging into profit where they thought they were like safely losing money and not ever going to pay taxes for a while,” Orn said. “And that’s why it’s such a big surprise for them. It’s hurting people, it’s like it’s a lot of money these companies don’t have.”
Source: News Formal (newsformal.com)
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