Marketing on 6th, USA, INC.: 4 Tax Code Changes Every American SME Owner Must Know

    NEW YORK, NY, March 29, 2015 /24-7PressRelease/ -- With the tax season upon us Marketing on 6th USA, INC. looks at the importance of understanding the various tax codes and what it means for a small business. Highlighting areas where a business can save money on employee expenditure or a tax repayment can be the difference between a successful year and a record profit or a disappointing year where a target was narrowly missed, or worse a tax payment that cannot be afforded and business restructuring may be the only option available.

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1. Claim small business health care credit - While certain provisions of the Affordable Care Act don't take effect until 2015, small businesses -- including tax-exempt employers -- that offer health insurance (Form 8941) to employees could qualify for a tax credit to help with the cost of providing coverage for low- and moderate-income workers. In 2014, that maximum increased to 50 percent, or 35 percent for tax-exempt employers. So a business owner who paid $5,000 toward an employee's health insurance plan now qualifies for savings of up to $2,500 rather than last year's maximum of $1,750. There are two caveats here: The credit can only be claimed for two consecutive years, and the business is required to purchase coverage through the SHOP Marketplace for small businesses. To qualify for the credit, the employer must also cover at least 50 percent of the premium and the business must have no more than 25 employees with an average salary of less than or equal to $50,000.

2. Capitalize on latest tax extenders - In December, Congress passed the "Tax Increase Prevention Act of 2014," which extended more than 50 tax breaks for individuals and small businesses. These include two important tax breaks for small businesses: Sec. 179 expensing: This applies to those who made capital purchases in 2014. For 2014, dollar limits for Sec. 179 expensing are at $500,000, with an investment ceiling of $2 million. This means small-business owners can deduct the full cost of up to $500,000 on most depreciable assets that have less than a 20-year life, such as new or used computer equipment, vehicles, furniture and more. Bonus depreciation: With 50 percent bonus depreciation, a company can deduct half the cost of new capital purchases in the first year. While the Sec. 179 deduction allows a business to deduct the small capital purchase immediately, the bonus depreciation could be more valuable because Sec. 179 is limited to business taxable income with any excess carried forward.

3. Understand deductible expenses - The tax code allows a small business to deduct the costs of running a business, as long as the expenses are ordinary and necessary. If a business has an item that is used for personal and business purposes, they can allocate the expense and deduct the business portion. If an asset's useful life extends beyond one year, you must depreciate, or deduct, over the term of the asset. Just be sure to document everything and retain any receipts. Running a home office? The IRS now provides a simple way to calculate the deduction associated with using a home for business. However, it does not change the criteria for who may claim the deduction. Running a start-up? The government encourages starting a new business by allowing a $5,000 write-off for start-up expenses. This could include advertising costs, employee training, a market survey and more.

4. Properly classify your workers - It could be tempting to classify an employee as an independent contractor because of the cost savings, but businesses should take caution. There are strict rules surrounding the proper classification of a worker, and steep penalties for failing to apply the law correctly.

Marketing on 6th, USA, INC. is an ambitious direct sales force that links Fortune 500 companies to their future consumers. They develop effective ways to promote their client's products and services. Face-to-face interactions with consumers allow us to build quality relationships which in turn generate a loyal customer base for their clients.

Marketing on 6th is an ambitious Direct Sales force that links Fortune 500 companies to their future consumers. Face-to-face interactions with consumers allow them to build quality relationships which generate a loyal customer base for their clients.

For more information Follow @MarketingOn6th on Twitter and 'like' them on Facebook.

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