Ready, Set, Tax Break


Ready, Set, Tax Break

Prepare to take advantage of tax opportunities for business owners in 2017.

February 14, 2017

The start of the new year is the perfect time to search out tax opportunities. Perhaps your state offers additional incentives or tax breaks for women-owned enterprises? Or perhaps you haven’t fully explored the available small business tax breaks and credits?

Good news for business owners, some of the uncertainty about deductions included in the PATH Act has finally been cleared. Congress passed the law back in 2015, but confusion set in regarding certain stipulations. Here’s a look at where they stand now and other options that could have a place in any business owner’s tax strategy.

Maximize Depreciations via Section 179

Extended in the PATH Act, this tax break allows your business to deduct up to $500,000 in expenses related to qualifying equipment or software purchased or leased during 2016. This includes office furniture and vehicles.

Bonus depreciation sweetens the deal, letting business owners immediately depreciate 50% of the cost of office-related property put to use in 2016. This provision was extended through 2017 and can be used in conjunction with Section 179.

Take Advantage of General Business Tax Credit

If your business was operating at a loss, bonus depreciation isn’t very useful to you right now. Luckily, you’re able to claim a higher limit on your refundable credits instead. The General Business Tax Credit is not a single separate credit, but an assortment of tax credits with specific qualifications the taxpayer must meet in order to receive. Congress can choose either to extend a credit or allow it to expire each year.

Consider a Small Business Health Care Tax Credit

Businesses that have fewer than 25 workers, pay average annual wages below $50,000, and cover 50% or more of health premiums might qualify for the Small Business Health Care Tax Credit. This credit is available to those eligible small businesses that purchase coverage for their employees through the Small Business Health Options Program (SHOP).

Employ a Work Opportunity Tax Credit

The Work Opportunity Tax Credit reduces income liability for small businesses if they hire employees who fall into certain “target groups who have consistently faced significant barriers to employment,” according to the U.S. Department of Labor. There are quite a few qualifying target groups, including summer youth employees, unemployed and/or disabled veterans, ex-felons, and food stamp or Temporary Assistance for Needy Families (TANF) recipients.

Evaluate Your Business Structure

Changing your ownership structure can give your business an advantage. At year’s end, owners with an LLC can still retroactively elect to be taxed as an S-corporation.

Take Advantage of a Net Operating Loss

If you’ve incurred net operating losses, the Internal Revenue Service (IRS) allows for a tax deduction known as a carryback that may generate a tax benefit against previous years’ profits, up to two years. Any net operating losses leftover can then be carried forward for up to 20 years, offering a potential reduction on taxes against future earned income. The rules are complicated, and include an option to waive the carryback period, so it’s important to consult a well-qualified tax professional to get this right.

Schedule a meeting with a knowledgeable accountant and your other professional advisors who know your specific financial situation. Without their guidance, you might miss deductions you qualify for.

Consider these resources for women pursuing entrepreneurial success.

Association for Enterprise Opportunity
Association of Women’s Business Centers
National Association of Women in Construction
National Association of Women in Real Estate Businesses
National Association of Women Business Owners
National Women’s Business Council
U.S. Women’s Chamber of Commerce
WEConnect International
Women’s Business Enterprise National Council
Women Impacting Public Policy
Women Presidents’ Organization


Raymond James financial advisers do not render tax advice. Please consult a qualified professional regarding tax matters. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation.

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