2012 Tax Law Changes that Affect your Business

With 2012 already here, we have listed below some of the notable tax law changes and how they will affect your business:

Reduced section 179 expense election – In 2011, you could elect up to $500,000 of an upfront deduction on qualifying new asset purchases. This amount allowed drops to only $139,000 in 2012. So if you need to buy some expensive equipment, better do it soon if you want to write it off up front!

Expiring 100% bonus depreciation – In 2011, most furniture and equipment purchases made qualified for 100% bonus depreciation, meaning that you could write off the whole cost just like they were ordinary expenses right away. This is set to drop in 2012 to only 50% so if you have any big purchases that you want to write off completely, better do it soon!

Worker retention credit – Don’t forget, if you hired someone between March 18th and December 31st of 2010, who was previously unemployed, you may qualify for a credit worth up to $1,000 in 2011 for retaining that worker.

Small business health insurance credit – This was a new one in 2010, if you paid over 50% of your employee health insurance costs, you may qualify for a nice credit of up to 35% of the costs you paid.

There are many other credits and provisions set to expire, but we don’t see too many businesses around here that qualify for them so we won’t even bother boring you with them.

More information can be found at the Internal Revenue Service website at:  www.irs.gov/businesses.