As entrepreneurs looking to start a corporation prepare for the new year, it would benefit them to take a step back and review new tax regulations that could change their plans for the immediate future.
When President Barack Obama signed the much debated Small Business Jobs Act in September, he also introduced several new tax changes that will affect small business owners, especially those looking to make big purchases.
According to Entrepreneur magazine contributor Mark Henricks, the Act doubles the expense limitation to $500,000 for fully writing off fixed assets such as office furniture, machinery, equipment and computer software.
And this benefit is not something to be scoffed at.
“For instance, if a professional service corporation subject to a flat tax of 35 percent invested $500,000 in computers, software and office furniture, it could reduce its federal tax bill by 35 percent of that amount,” Henricks writes.
Employees stand to benefit from the tax provisions as well. CNN reports that the breaks could boost worker paychecks by nearly $40 per week.
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