Small businesses in New Jersey often rely on various tax deductions in order to write off business equipment and even employee expenses. There are close to 50 of these special write-offs that small companies are typically allowed to claim on tax returns. However, many of these expired in 2013 and have not yet been extended. If they are not extended, businesses have to make some tough decisions about their futures, which could lead to delayed spending and hiring.
2013 tax returns are not affected by the expiration dates. But tax returns for 2014 and beyond will be unless Congress extends the dates. Business owners fear that extensions won't happen because of lost revenue.
Congress could still extend these write-offs at any time. But until then, businesses have to plan their year as if these deductions no longer exist. Probably one of the biggest ones is the Section 179 deduction, which allows businesses to write off up to $500,000 in business equipment. If this deduction is not extended, the limit falls to $25,000.
However, there are other deductions available to some qualifying business owners. For example, things such as repairs can be claimed immediately rather than having to wait. In addition, there are deductions available to companies who pay health insurance for 25 or fewer employees.
Businesses spend a lot of money in order to stay afloat. Money is used to attract and retain customers, keep employees on the payroll, repair and replace equipment, pay taxes and buy day-to-day necessities, among other things. The ability to deduct some of these expenses is crucial. Without these deductions, the future of many small businesses could be in jeopardy.
Source: New York Times, " For Small Businesses, a Road Without a Map," Conrad De Aenlle, Feb. 7, 2014