We all know how difficult keeping up with taxes can be.
From new tax breaks to new tax laws, changes can ultimately affect everyone filing—individuals, families and business owners alike!
But despite how difficult tax laws and lingo can be to understand, keeping up with, learning about and planning for changes may ultimately help you keep more of your hard-earned money in your pocket.
Stay up-to-date! Here are two important changes:
Depreciation Rules
If you buy equipment for your business, you’ll definitely want to know about the new deprecation laws.
Designed with businesses in mind, the depreciation law makes purchasing equipment during the calendar year more financially attractive. Unfortunately, however, this law has been restored to its original limit of $25,000—from $500,000!
Yes, before 2014, you could deduct up to $500,000 of all qualifying assets—from new equipment, machinery and furniture to computers, off-the-shelf software, fixtures and even vehicles. This year, the limit drops to a mere $25,000 and you’re no longer allowed to take the additional first-year depreciation of 50% of the adjusted basis on property.
Home Office Deduction Rules
When calculating a home office deduction, you used to have to determine the percentage of your home that the office space takes up and accordingly divvy up your home’s utilities, interest, insurance and repairs. You’d then add these indirect costs of your home office to the direct costs spent on your office—the total would be your qualifying home office deduction.
But those days are no more. Say hello to a new simplified method of calculating your home office deduction!
Now, a deduction is equal to $5 times the square footage of your home office space. Your total office space, however, is limited to 300 square feet. Also, keep in mind: if your income if greater than your expenses, you can take the full deduction; if your expenses are greater, you can only take part of the deduction.
Did you know: our experts can handle any and all of your tax concerns? For a FREE tax consultation, call today! (631) 921-6894.
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