Tax Break for Businesses
As a small business owner, you probably feel financially strapped from time to time. Getting capital to keep your business afloat is, in many cases, a process that takes what seems like forever. Every penny matters and the faster you can get your hands on some cash, the better.
Well, here’s some good news from the IRS.
As part of the economic stimulus package that the government has recently provided, many businesses are eligible to receive a major tax break on purchased property for the year that the property is put into use. This means that there is a 50 percent depreciation allowance on qualified property.
Depreciation is the decrease in value of a given piece of property due to the natural effects of entropy. Normally, the cost of this wear and tear would be expressed on a company’s balance sheet over several years. With the new depreciation allowance provided by the government, a business can now write off half of qualified property as one lump sum, for property costing up to $250,000.
This allowance will keep some money in your pocket when April 15th rolls around. It has long been said that poor cash reserve is one of the main reasons for small business deterioration. More money means that your business will have a much better chance for success.
For more details on the new depreciation allowance, visit www.irs.gov.
As always, MetroAction recommends that you consult with your accountant and/or attorney for all relevant business matters.