Small Business Benefits!

Qualified Business Income Deduction – The taxpayer can deduct 20% of their qualified business income up to $164,900 for single filers & phases out thereafter up to the threshold of $214,900.

Depreciation – The process of deducting the cost of a tangible business asset over its useful life. Ex. (If a business computer cost $2,000 & it is useful for 5 years then deduct $400 per year for depreciation.) This is based on MARCS – Modified Accelerated Cost Recovery System for the U.S.

Amortization – The process of spreading the cost of an intangible business asset over its useful life. Ex. (goodwill, patents, copyrights, trademarks) Also, for the periodic repayment of loans over time.

Section 1250 recapture tax – The portion of the gain related to previously used depreciation allowances. Only applicable to real estate & gains are taxed at a 25% maximum rate.

In addition, business expenses are deducted from income the year incurred. There are numerous tax benefits to owning your own small business, so this is just to name a few.

For more information on small businesses go to Tax Tips.

Discover all our benefits at SolidTaxServices.

In Trust,

Ashley Thomas, EA, CEO