Business Tax Tips from Jim Chaston

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By Jim Chaston, CPA

1.    Congress has gotten serious about correct classification of employee versus independent contractors and increased penalties drastically. Penalties can be more than 100 percent of payments for misclassified employees. Listen to a tax professional, not other business associates and friends. Employee/Contractor classification is based on behavioral control, financial control and a relationship test, NOT a written contract.

2.    Identity theft is a huge issue. Be sure to secure all digital and electronic information, encrypt hard drives, require passwords, install firewalls and anti-virus software, etc.

3.    Repairs and Small Equipment Regulation requires most repairs and small equipment be capitalized and not expensed when paid. A safe harbor allowing you to expense an item up to $500 if you file the election to do so with your return was increased to $2,500 effective Jan. 1, 2016.

4.    Section 179 Depreciation increased to $500,000 for 2015 from $25,000.

5.    You can still get a tax credit for implementing a retirement plan in your company for up to 50 percent of the cost of implementation.

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