Five Business Deductions Your Business May Have Overlooked
Ohio Small Business Deduction - When this legislation was signed it allowed a deduction for eligible small businesses to take a 50% tax deduction on their first $250,000 of Ohio business income. However, in 2014 it allows Ohio's Small Business owners a 75% deduction of "net business income from an individual's adjusted gross income reported on their Ohio Personal Income Tax."
Section 179 Deduction - Tax Extenders Act retroactively reinstates the $500,000 depreciation limit, with a two million dollar investment limit on Section 179 property and the 50% bonus first year depreciation. These depreciation incentives can potentially save your company thousands of dollars on equipment purchases, tangible personal property used in business, property attached to your building that is not a structural component of the building, and other qualified assets.
Personal Vehicle Deduction - You may be able to deduct expenses related to your personal vehicle used for your business as long as it is used for business purposes and not just commuting. You may deduct the standard mileage rate of $.56 cents per mile for business travel and $.26 cents for charitable use, or you may use actual vehicle expenses.
Stock Gain Deduction - Certain gains generated by qualified small business stock may be excluded per provision IRC Sec. 1202. This provision was designed to encourage small business investment and help strengthen the small business infrastructure. This incentive although somewhat complex allows for significant tax savings on certain purchases of small business stock. Its complicated nature makes it essential to work with a qualified tax advisor.
Charitable Giving Deduction - Donations to nonprofit organizations (usually a 501(c)(3)) during the year will in most cases allow a deduction from your income for at least part of your contribution. An eligible donation consists of cash, volunteered services, sponsorship of a charity event, or the donation of inventory or services. A good tax advisor can help you receive the maximum benefit for every dollar donated.
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Last updated 18-Jan-2016.