Whether you file as a corporation or sole proprietor here’s what business owners need to know about tax change for 2014.
Standard Mileage Rates
The standard mileage rates in 2014 are as follows: 56 cents per business mile driven, 23.5 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 $51,000 (adjusted for inflation).
Starting 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
In 2014 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.
SIMPLE IRA Plan Contributions
Contribution limits for SIMPLE IRA plans remain at $12,000 for persons under age 50 and $14,500 for persons age 50 or older in 2014. The maximum compensation used to determine contributions increases to $260,000.
Please contact us if you need help understanding which deductions and tax credits you are entitled to. We are always available to assist you.