Whether your business sells petticoats or barbells, tobacco or jewelry, DVDs or carburetors, shoplifting can hurt your bottom line. One independent study found that over 20 million people steal from retail stores each year at an annual cost of more than $10 billion. (more…)
Business Development
How To Get Paid Straight Away
Most businesses function in a give and take fashion – while you may be providing a service, you are most likely always paying someone else to supply a service to you, and so on. (more…)
Selling Your Firm
When selling your firm you need to be prepared for several things from the outset. Whatever the purpose of sale may be, there are some suitable guidelines to follow that will best prepare you as the seller for the reality of the sale itself. (more…)
IRS Explains The New Bonus Depreciation Rules
Under the Tax Relief Act of 2010, you may be able to write off the entire cost of business property placed in service this year, thanks to 100% “bonus depreciation.”
Prior to this law, a business was able to claim 50% bonus depreciation on qualified new (but not used) property placed in service in 2010.
This included property with a cost recovery period of 20 years or less, most computer software, qualified leasehold improvement property, and certain water utility property. Bonus depreciation could be coordinated with Section 179 first-year expensing and regular depreciation deductions (subject to the annual limits).
The Tax Relief Act, signed December 17, 2010, improves and extends the tax benefits. It allows a business to claim 100% bonus depreciation for qualified property placed in service from September 9, 2010, through December 31, 2011 (through 2012 for property with a cost recovery period of ten years or more and certain aircraft and transportation property). 50% bonus depreciation can be claimed for qualified property placed in service during 2012.
The Tax Relief Act of 2010 did not change the definition of “qualified property”; it remains the same as it was before.
IRS issues guidance
Recently, the IRS issued new guidance on using bonus depreciation. It focuses on the following areas:
Depreciation step-down
You’re allowed to “step down” from 100% bonus depreciation to 50% bonus depreciation this year if it suits your needs. For example, it may not be advantageous for a business to front-load its depreciation deductions to receive the maximum amount. The IRS guidance spells out the procedure for cutting back to 50% bonus depreciation.
Company vehicles
The first-year depreciation deduction for “luxury cars” and other vehicles is enhanced by $8,000 due to the bonus depreciation rules.
Be aware that certain heavy-duty SUVs and other vehicles weighing more than 6,000 pounds are exempt from the luxury car limits. If purchased after September 8, 2010, and before January 1, 2012, they may qualify for 100% bonus depreciation.
Qualified leasehold property
The IRS says that qualified restaurant and retail improvement properties may be eligible for 100% bonus depreciation under the definition of “qualified leasehold property.”
Component depreciation
A business may be able to deduct certain components of a business building over a faster cost recovery period than the usual 39-year period required for an entire building. The IRS ruling authorizes an election to use 100% bonus depreciation for qualified components of a self-constructed building.
Even with the recent IRS guidance, the depreciation rules remain very complicated. For assistance in applying the rules for maximum tax benefit to your business, contact our office.
Read The Writing On The Wall
Imagine taking a newspaper classified ad and posting it up on an electronic signboard. Think about the reach your message automatically achieves. This form of advertising is called digital signage: an electronic display that conveys an advertising message. (more…)
New Business: Small Business Alert! Hackers Target Small Companies
If you think your business computers are safe from hacking attacks because your company is too small to appeal to hackers, think again. Though the big international companies are indeed attractive to hackers, these web criminals are beginning to find small businesses lucrative targets too. (more…)
How To Value Your Business Inventory
Having an accurate picture of your company’s inventory costs is often essential for determining profitability. If you don’t know how much your inventory is worth, you can’t determine the cost of goods sold and your company’s net profit. If you plan to sell the firm, potential buyers will want to know the value of items sitting on your shelves, stacked in your warehouse, and being prepared for sale. Banks, too, will want to understand the value of your inventory before extending credit. (more…)
Is A Business Plan Still Necessary?
There is a heated debate regarding the merits of writing a detailed business plan. The gist of the debate is whether or not there is a benefit (financial and overall) to writing a detailed business plan, or whether this has become a dated concept and a fledgling business can thrive without one. (more…)
