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Business Owners Year-End Strategies

November 5, 2012

Many business owners are sitting on their hands when it comes to committing significant cash to any project; from expansion to hiring these owners commonly cite uncertain tax and regulatory policy as some of their biggest fears for the future growth of their businesses. Regardless of future policies, there are still some tried and true tax planning opportunities available for owners to reduce their 2012 tax burdens now.

The first involves those who need equipment for their businesses. This equipment can include office furniture, computers or any type of depreciable office or manufacturing equipment used in your workplace. Under section 179 of the internal revenue code, businesses can deduct up to 100% of the cost of new equipment in the year that the equipment is placed into service. The limit to this deduction exceeds $130,000 and is scheduled to drop to $25,000 in 2013. In addition to the up-front section 179 deduction, equipment purchases may also be eligible for a bonus depreciation deduction of up to 50% of the cost of the items placed into service.

The key for purchases made this year is that the asset is in fact placed in service. Ordering today and installing in February 2013 will not help you. The stuff has to be in your shop and ready to go by 12/31/2012.

Vehicle purchases can also qualify for vehicles placed in service before 12/31. For large SUVs and trucks, the benefits are even better with both section 179 deductions and bonus depreciation rates available.

So if you have plans to purchase new equipment, the tax advantage time to do it is now and reduce your 2012 tax burden.

Contact SVHS

The certified public accountants (CPA) and advisors at Sadd Velazquez Higashi Shammaa are ready to assist you with all of your accounting and consulting needs. Contact us today and we will connect you with the professional you need.

Sadd Velazquez Higashi Shammaa, LLP
330 North Brand Blvd., Suite 200
Glendale, CA 91203

Phone: (818) 547-5701
Fax: (818) 547-5708